nginx-feature-mcp-dec-update-infraaust.govcms7.amazee.io
Open in
urlscan Pro
2a04:4e42:200::515
Public Scan
URL:
https://nginx-feature-mcp-dec-update-infraaust.govcms7.amazee.io/
Submission: On December 04 via automatic, source certstream-suspicious — Scanned from US
Submission: On December 04 via automatic, source certstream-suspicious — Scanned from US
Form analysis 7 forms found in the DOM
GET /search
<form action="/search" method="get" id="views-exposed-form-content-search-page-1" accept-charset="UTF-8" data-once="form-updated" data-drupal-form-fields="edit-keys">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-keys form-item-keys">
<label for="edit-keys">Enter search terms</label>
<input placeholder="What are you looking for?" data-drupal-selector="edit-keys" type="text" id="edit-keys" name="keys" value="" size="30" maxlength="128" class="form-text au-text-input" tabindex="0">
</div>
<div id="edit-field-sector-taxonomy-reference" class="form-checkboxes"></div>
<div id="edit-field-category-taxonomy-referenc" class="form-checkboxes"></div>
<div id="edit-field-actor-taxonomy-reference-1" class="form-checkboxes"></div>
<div data-drupal-selector="edit-actions" class="form-actions js-form-wrapper form-wrapper" id="edit-actions--13"> <input data-drupal-selector="edit-submit-content-search" type="submit" id="edit-submit-content-search" value="Submit search"
class="js-form-submit form-submit au-btn">
</div>
</form>POST /
<form class="webform-submission-form webform-submission-add-form webform-submission-download-form webform-submission-download-add-form js-webform-details-toggle webform-details-toggle" data-drupal-selector="webform-submission-download-add-form"
action="/" method="post" id="webform-submission-download-add-form" accept-charset="UTF-8" data-once="form-updated webform-details-toggle" data-drupal-form-fields="edit-file-name,edit-audience,edit-actions-submit,edit-url">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-file-name form-item-file-name">
<label for="edit-file-name">File name</label>
<input data-drupal-selector="edit-file-name" type="text" id="edit-file-name" name="file_name" value="/sites/default/files/2024-08/IA24_Embodied%20Carbon%20Report_09-08-24.pdf" size="60" maxlength="255" class="form-text au-text-input">
</div>
<div class="js-form-item form-item js-form-type-select form-type-select js-form-item-audience form-item-audience">
<label for="edit-audience" class="js-form-required form-required">Please select your organisation type</label>
<select style="organisation" data-drupal-selector="edit-audience" id="edit-audience" name="audience" class="form-select required au-select" required="required" aria-required="true">
<option value="" selected="selected">- Select -</option>
<option value="Education / Academia">Education / Academia</option>
<option value="Federal Government">Federal Government</option>
<option value="General Public">General Public</option>
<option value="IA">IA</option>
<option value="Industry">Industry</option>
<option value="Local Government">Local Government</option>
<option value="Media / Journalism">Media / Journalism</option>
<option value="Other">Other</option>
<option value="Private Sector">Private Sector</option>
<option value="State Government">State Government</option>
</select>
</div>
<div data-drupal-selector="edit-actions" class="form-actions webform-actions js-form-wrapper form-wrapper" id="edit-actions"> <input class="webform-button--submit download js-form-submit form-submit au-btn"
data-drupal-selector="edit-actions-submit" type="submit" id="edit-actions-submit" name="op" value="Download">
</div>
<input data-drupal-selector="form-zckxflemkoeacu7eepmlcw7yo76u83sg-dnzzhtbzx8" type="hidden" name="form_build_id" value="form-ZCkXfLEMKOeACU7eEPMLcW7yo76U83Sg-dnzZhTbZX8" class="au-text-input">
<input data-drupal-selector="edit-webform-submission-download-add-form" type="hidden" name="form_id" value="webform_submission_download_add_form" class="au-text-input">
<input data-drupal-selector="edit-honeypot-time" type="hidden" name="honeypot_time" value="uzW6gINcxUJZS98HaRc9ugbOfXY6q9BAhCaAiLeNd6M" class="au-text-input">
<div class="url-textfield js-form-wrapper form-wrapper" style="display: none !important;">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-url form-item-url">
<label for="edit-url">Leave this field blank</label>
<input autocomplete="off" data-drupal-selector="edit-url" type="text" id="edit-url" name="url" value="" size="20" maxlength="128" class="form-text au-text-input">
</div>
</div>
</form>POST /
<form class="webform-submission-form webform-submission-add-form webform-submission-download-form webform-submission-download-add-form js-webform-details-toggle webform-details-toggle" data-drupal-selector="webform-submission-download-add-form-2"
action="/" method="post" id="webform-submission-download-add-form--2" accept-charset="UTF-8" data-once="form-updated webform-details-toggle" data-drupal-form-fields="edit-file-name--2,edit-audience--2,edit-actions-submit--2,edit-url--2">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-file-name form-item-file-name">
<label for="edit-file-name--2">File name</label>
<input data-drupal-selector="edit-file-name" type="text" id="edit-file-name--2" name="file_name" value="/sites/default/files/2024-08/IA24_Embodied%20Carbon%20Report_09-08-24.pdf" size="60" maxlength="255" class="form-text au-text-input">
</div>
<div class="js-form-item form-item js-form-type-select form-type-select js-form-item-audience form-item-audience">
<label for="edit-audience--2" class="js-form-required form-required">Please select your organisation type</label>
<select style="organisation" data-drupal-selector="edit-audience" id="edit-audience--2" name="audience" class="form-select required au-select" required="required" aria-required="true">
<option value="" selected="selected">- Select -</option>
<option value="Education / Academia">Education / Academia</option>
<option value="Federal Government">Federal Government</option>
<option value="General Public">General Public</option>
<option value="IA">IA</option>
<option value="Industry">Industry</option>
<option value="Local Government">Local Government</option>
<option value="Media / Journalism">Media / Journalism</option>
<option value="Other">Other</option>
<option value="Private Sector">Private Sector</option>
<option value="State Government">State Government</option>
</select>
</div>
<div data-drupal-selector="edit-actions" class="form-actions webform-actions js-form-wrapper form-wrapper" id="edit-actions--3"> <input class="webform-button--submit download js-form-submit form-submit au-btn"
data-drupal-selector="edit-actions-submit-2" type="submit" id="edit-actions-submit--2" name="op" value="Download">
</div>
<input data-drupal-selector="form-tgavekky5lokk5-jshlmfxyp9lqw7xwemqtrqsx9cxw" type="hidden" name="form_build_id" value="form-tgavEkKy5LOKk5-jshlMFXyP9lQW7xWEMQtRqsX9CXw" class="au-text-input">
<input data-drupal-selector="edit-webform-submission-download-add-form-2" type="hidden" name="form_id" value="webform_submission_download_add_form" class="au-text-input">
<input data-drupal-selector="edit-honeypot-time" type="hidden" name="honeypot_time" value="aOho8zSDZdYNFlQk18imTLeVMUPu75IrWsCcGbJA-QE" class="au-text-input">
<div class="url-textfield js-form-wrapper form-wrapper" style="display: none !important;">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-url form-item-url">
<label for="edit-url--2">Leave this field blank</label>
<input autocomplete="off" data-drupal-selector="edit-url" type="text" id="edit-url--2" name="url" value="" size="20" maxlength="128" class="form-text au-text-input">
</div>
</div>
</form>POST /
<form class="webform-submission-form webform-submission-add-form webform-submission-download-form webform-submission-download-add-form js-webform-details-toggle webform-details-toggle" data-drupal-selector="webform-submission-download-add-form-3"
action="/" method="post" id="webform-submission-download-add-form--3" accept-charset="UTF-8" data-once="form-updated webform-details-toggle" data-drupal-form-fields="edit-file-name--3,edit-audience--3,edit-actions-submit--3,edit-url--3">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-file-name form-item-file-name">
<label for="edit-file-name--3">File name</label>
<input data-drupal-selector="edit-file-name" type="text" id="edit-file-name--3" name="file_name" value="/sites/default/files/2024-04/IA2024_Annual-Statement-Performance_0.pdf" size="60" maxlength="255" class="form-text au-text-input">
</div>
<div class="js-form-item form-item js-form-type-select form-type-select js-form-item-audience form-item-audience">
<label for="edit-audience--3" class="js-form-required form-required">Please select your organisation type</label>
<select style="organisation" data-drupal-selector="edit-audience" id="edit-audience--3" name="audience" class="form-select required au-select" required="required" aria-required="true">
<option value="" selected="selected">- Select -</option>
<option value="Education / Academia">Education / Academia</option>
<option value="Federal Government">Federal Government</option>
<option value="General Public">General Public</option>
<option value="IA">IA</option>
<option value="Industry">Industry</option>
<option value="Local Government">Local Government</option>
<option value="Media / Journalism">Media / Journalism</option>
<option value="Other">Other</option>
<option value="Private Sector">Private Sector</option>
<option value="State Government">State Government</option>
</select>
</div>
<div data-drupal-selector="edit-actions" class="form-actions webform-actions js-form-wrapper form-wrapper" id="edit-actions--5"> <input class="webform-button--submit download js-form-submit form-submit au-btn"
data-drupal-selector="edit-actions-submit-3" type="submit" id="edit-actions-submit--3" name="op" value="Download">
</div>
<input data-drupal-selector="form-ehgm4fcrqll-91yxmqy-xnzknqygrvchbej32mohaoq" type="hidden" name="form_build_id" value="form-eHGm4fCrQLl-91YxMqy-xNzKnQyGrVCHBeJ32MOhAoQ" class="au-text-input">
<input data-drupal-selector="edit-webform-submission-download-add-form-3" type="hidden" name="form_id" value="webform_submission_download_add_form" class="au-text-input">
<input data-drupal-selector="edit-honeypot-time" type="hidden" name="honeypot_time" value="mdAu6iXdwB_BQiCKnLqCpG34ztsxXOXaG-y7Y_dr1Bs" class="au-text-input">
<div class="url-textfield js-form-wrapper form-wrapper" style="display: none !important;">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-url form-item-url">
<label for="edit-url--3">Leave this field blank</label>
<input autocomplete="off" data-drupal-selector="edit-url" type="text" id="edit-url--3" name="url" value="" size="20" maxlength="128" class="form-text au-text-input">
</div>
</div>
</form>POST /
<form class="webform-submission-form webform-submission-add-form webform-submission-download-form webform-submission-download-add-form js-webform-details-toggle webform-details-toggle" data-drupal-selector="webform-submission-download-add-form-4"
action="/" method="post" id="webform-submission-download-add-form--4" accept-charset="UTF-8" data-once="form-updated webform-details-toggle" data-drupal-form-fields="edit-file-name--4,edit-audience--4,edit-actions-submit--4,edit-url--4">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-file-name form-item-file-name">
<label for="edit-file-name--4">File name</label>
<input data-drupal-selector="edit-file-name" type="text" id="edit-file-name--4" name="file_name" value="/sites/default/files/2024-04/IA2024_Annual-Statement-Performance_0.pdf" size="60" maxlength="255" class="form-text au-text-input">
</div>
<div class="js-form-item form-item js-form-type-select form-type-select js-form-item-audience form-item-audience">
<label for="edit-audience--4" class="js-form-required form-required">Please select your organisation type</label>
<select style="organisation" data-drupal-selector="edit-audience" id="edit-audience--4" name="audience" class="form-select required au-select" required="required" aria-required="true">
<option value="" selected="selected">- Select -</option>
<option value="Education / Academia">Education / Academia</option>
<option value="Federal Government">Federal Government</option>
<option value="General Public">General Public</option>
<option value="IA">IA</option>
<option value="Industry">Industry</option>
<option value="Local Government">Local Government</option>
<option value="Media / Journalism">Media / Journalism</option>
<option value="Other">Other</option>
<option value="Private Sector">Private Sector</option>
<option value="State Government">State Government</option>
</select>
</div>
<div data-drupal-selector="edit-actions" class="form-actions webform-actions js-form-wrapper form-wrapper" id="edit-actions--7"> <input class="webform-button--submit download js-form-submit form-submit au-btn"
data-drupal-selector="edit-actions-submit-4" type="submit" id="edit-actions-submit--4" name="op" value="Download">
</div>
<input data-drupal-selector="form-7ib8ibekx2y-jsuuuk1bylqn-zr575bfhac-zpg8tx4" type="hidden" name="form_build_id" value="form-7ib8ibEkX2y-jSUUUK1bYlqn_zr575BfHaC_ZpG8tX4" class="au-text-input">
<input data-drupal-selector="edit-webform-submission-download-add-form-4" type="hidden" name="form_id" value="webform_submission_download_add_form" class="au-text-input">
<input data-drupal-selector="edit-honeypot-time" type="hidden" name="honeypot_time" value="YE0jmXpy59Ae92JvkP2TjNFbq2aDe9oX5uYISm32ifY" class="au-text-input">
<div class="url-textfield js-form-wrapper form-wrapper" style="display: none !important;">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-url form-item-url">
<label for="edit-url--4">Leave this field blank</label>
<input autocomplete="off" data-drupal-selector="edit-url" type="text" id="edit-url--4" name="url" value="" size="20" maxlength="128" class="form-text au-text-input">
</div>
</div>
</form>POST /
<form class="webform-submission-form webform-submission-add-form webform-submission-download-form webform-submission-download-add-form js-webform-details-toggle webform-details-toggle" data-drupal-selector="webform-submission-download-add-form-5"
action="/" method="post" id="webform-submission-download-add-form--5" accept-charset="UTF-8" data-once="form-updated webform-details-toggle" data-drupal-form-fields="edit-file-name--5,edit-audience--5,edit-actions-submit--5,edit-url--5">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-file-name form-item-file-name">
<label for="edit-file-name--5">File name</label>
<input data-drupal-selector="edit-file-name" type="text" id="edit-file-name--5" name="file_name" value="/sites/default/files/2024-04/IA2024_Annual-Statement-Budget_0.pdf" size="60" maxlength="255" class="form-text au-text-input">
</div>
<div class="js-form-item form-item js-form-type-select form-type-select js-form-item-audience form-item-audience">
<label for="edit-audience--5" class="js-form-required form-required">Please select your organisation type</label>
<select style="organisation" data-drupal-selector="edit-audience" id="edit-audience--5" name="audience" class="form-select required au-select" required="required" aria-required="true">
<option value="" selected="selected">- Select -</option>
<option value="Education / Academia">Education / Academia</option>
<option value="Federal Government">Federal Government</option>
<option value="General Public">General Public</option>
<option value="IA">IA</option>
<option value="Industry">Industry</option>
<option value="Local Government">Local Government</option>
<option value="Media / Journalism">Media / Journalism</option>
<option value="Other">Other</option>
<option value="Private Sector">Private Sector</option>
<option value="State Government">State Government</option>
</select>
</div>
<div data-drupal-selector="edit-actions" class="form-actions webform-actions js-form-wrapper form-wrapper" id="edit-actions--9"> <input class="webform-button--submit download js-form-submit form-submit au-btn"
data-drupal-selector="edit-actions-submit-5" type="submit" id="edit-actions-submit--5" name="op" value="Download">
</div>
<input data-drupal-selector="form-vzciwqtedw3ekniem29v-dn0wtgqyf5lyiq7iywc11c" type="hidden" name="form_build_id" value="form-VZCIWQtEDw3EKNIeM29V-dN0wTgqYf5LYiq7iyWc11c" class="au-text-input">
<input data-drupal-selector="edit-webform-submission-download-add-form-5" type="hidden" name="form_id" value="webform_submission_download_add_form" class="au-text-input">
<input data-drupal-selector="edit-honeypot-time" type="hidden" name="honeypot_time" value="R-kutYHOwrHOlVUfaLT2ibJBD4qKzuQcMII7IboaBkw" class="au-text-input">
<div class="url-textfield js-form-wrapper form-wrapper" style="display: none !important;">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-url form-item-url">
<label for="edit-url--5">Leave this field blank</label>
<input autocomplete="off" data-drupal-selector="edit-url" type="text" id="edit-url--5" name="url" value="" size="20" maxlength="128" class="form-text au-text-input">
</div>
</div>
</form>POST /
<form class="webform-submission-form webform-submission-add-form webform-submission-download-form webform-submission-download-add-form js-webform-details-toggle webform-details-toggle" data-drupal-selector="webform-submission-download-add-form-6"
action="/" method="post" id="webform-submission-download-add-form--6" accept-charset="UTF-8" data-once="form-updated webform-details-toggle" data-drupal-form-fields="edit-file-name--6,edit-audience--6,edit-actions-submit--6,edit-url--6">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-file-name form-item-file-name">
<label for="edit-file-name--6">File name</label>
<input data-drupal-selector="edit-file-name" type="text" id="edit-file-name--6" name="file_name" value="/sites/default/files/2024-04/IA2024_Annual-Statement-Budget_0.pdf" size="60" maxlength="255" class="form-text au-text-input">
</div>
<div class="js-form-item form-item js-form-type-select form-type-select js-form-item-audience form-item-audience">
<label for="edit-audience--6" class="js-form-required form-required">Please select your organisation type</label>
<select style="organisation" data-drupal-selector="edit-audience" id="edit-audience--6" name="audience" class="form-select required au-select" required="required" aria-required="true">
<option value="" selected="selected">- Select -</option>
<option value="Education / Academia">Education / Academia</option>
<option value="Federal Government">Federal Government</option>
<option value="General Public">General Public</option>
<option value="IA">IA</option>
<option value="Industry">Industry</option>
<option value="Local Government">Local Government</option>
<option value="Media / Journalism">Media / Journalism</option>
<option value="Other">Other</option>
<option value="Private Sector">Private Sector</option>
<option value="State Government">State Government</option>
</select>
</div>
<div data-drupal-selector="edit-actions" class="form-actions webform-actions js-form-wrapper form-wrapper" id="edit-actions--11"> <input class="webform-button--submit download js-form-submit form-submit au-btn"
data-drupal-selector="edit-actions-submit-6" type="submit" id="edit-actions-submit--6" name="op" value="Download">
</div>
<input data-drupal-selector="form-enym0txzccbwwz7sq9rw4rt6ahguqbsk4e77i-m9g3u" type="hidden" name="form_build_id" value="form-eNYm0TxZCCBWWz7SQ9rW4Rt6aHGuQBSk4E77I_m9G3U" class="au-text-input">
<input data-drupal-selector="edit-webform-submission-download-add-form-6" type="hidden" name="form_id" value="webform_submission_download_add_form" class="au-text-input">
<input data-drupal-selector="edit-honeypot-time" type="hidden" name="honeypot_time" value="Ws_fd5c9PM8V03u3iH7bKtdzMktobJ5o3S4YpGUcys0" class="au-text-input">
<div class="url-textfield js-form-wrapper form-wrapper" style="display: none !important;">
<div class="js-form-item form-item js-form-type-textfield form-type-textfield js-form-item-url form-item-url">
<label for="edit-url--6">Leave this field blank</label>
<input autocomplete="off" data-drupal-selector="edit-url" type="text" id="edit-url--6" name="url" value="" size="20" maxlength="128" class="form-text au-text-input">
</div>
</div>
</form>Text Content
Skip to main content
Enter search terms
close navigation menu
Main navigation
* Priority List
* Projects
* Overview
* Assessment Framework
* Training
* Submit a proposal
* Frequently asked questions
* Proposal evaluations
* Under Evaluation
* Past Evaluations
* Under Delivery or Operational
* Summary of proposals evaluated
* Funding & Financing
* Reports
* Overview
* Annual Statements
* Infrastructure Market Capacity
* Embodied Carbon Projections
* Regional Strengths and Gaps
* Australian Infrastructure Plan 2021
* Australian Infrastructure Audit 2019
* Valuing emissions for economic analysis
* View all our reports
* Data
* News
* Overview
* Media Releases
* Speeches
* Newsletters
* About
* What we do
* Our structure
* Commissioners
* Audit Risk & Compliance
* CEO
* Our values
* Careers
* Our Reconciliation Action Plan
* Accountability & Reporting
* Public Interest Disclosures
* Annual Reports
* Corporate Plan
* Freedom of Information
* Contact
* Subscribe
open navigation menu
INDEPENDENT EVIDENCE-BASED ADVICE ON INFRASTRUCTURE PLANNING, POLICY AND
PRIORITIES TO BENEFIT ALL AUSTRALIANS
Listen
increase text size print page
Embodied Carbon Projections
Infrastructure Australia’s Embodied Carbon Projections for Australian
Infrastructure and Buildings report forms part of our broader advice to support
the Australian Government’s decarbonisation priorities and objectives.
Annual Statements
Infrastructure Australia’s annual Budget and Performance Statements.
Infrastructure Priority List
A credible pipeline of unfunded nationally significant proposals.
Infrastructure Market Capacity
Analysis and reporting on the capacity of the market to meet Australia’s
infrastructure pipeline demand, including dashboards, deep dive reports and...
Assessment Framework
The framework we use to assess infrastructure proposals and guidance for
best-practice business case development.
Innovate RAP
As we move to the next stage of our reconciliation journey, we are proudly
publishing our Innovate Reconciliation Action Plan (RAP). Committing us...
VIEW ALL REPORTS
Key Findings Recommendations Foreword Executive summary Current embodied carbon
initiatives Section 1: Introduction Section 2: Baseline measures of embodied
carbon Section 3: Barriers and opportunities Section 4: Cost and abatement
potential Section 5: Accounting for uncertainty: hybrid analysis Section 6:
Methodology and Assumptions Appendix – Consultation insights Glossary Endnotes
EMBODIED CARBON PROJECTIONS FOR AUSTRALIAN INFRASTRUCTURE AND BUILDINGS
--------------------------------------------------------------------------------
15 July 2024
KEY FINDINGS
1. Currently, buildings and infrastructure are directly responsible for almost
one third of Australia’s total carbon emissions, and indirectly responsible
for over half of all emissions.
2. Embodied carbon from building activity contributed 10% of national carbon
emissions in 2023, with upfront carbon contributing 7%. Unlike operational
emissions, which can be reduced by decarbonising the grid using efficient
equipment and continuous commissioning, embodied carbon emissions are locked
in once the asset is complete. Reducing embodied carbon emissions generates
significant and immediate abatement.
3. The largest sources of embodied carbon in 2022–23 was calculated to be
buildings (21 Mt CO₂e), followed by transport infrastructure (10 Mt CO₂e)
and then utilities (5 Mt CO₂e).
4. The upfront embodied carbon in Australia’s pipeline of infrastructure and
buildings is forecast to be between 37 Mt CO₂e and 64 Mt CO₂e per year for
the next 5 years, equating to 247 Mt CO₂e unless deliberate action is taken
to reduce this.
5. Upfront emissions occur during and/or prior to construction and account for
7% of Australia’s national emissions in 2022–23, with most of these
emissions originating from the manufacture of construction materials.
6. A 23% reduction in upfront carbon emissions is possible by 2026–27 by
applying like-for-like decarbonisation strategies that that can be achieved
by industry and government actively working together. This is equivalent to
a reduction of 9 Mt CO₂e, roughly 2% of Australia’s gross national GHG
emissions of 529 Mt CO₂e in 2022–23.
7. In addition to like-for-like decarbonisation strategies, further significant
emissions reductions would be achievable through design optimisation and
less-build strategies.
RECOMMENDATIONS
This report offers the following six recommendations aimed at supporting the
development of Australian Government decarbonisation policies for infrastructure
and the built environment.
REPORT FINDING
OPPORTUNITIES
RECOMMENDATIONS
The decarbonisation of the built environment suffers from industry silos and a
lack of collective ambition. While governments and industry are working hard to
manage their emissions, efforts often focus on individual assets, overlooking
interconnected networks and systems. Moreover, project-level decarbonisation
initiatives often commence late in the planning stages, risking the
discretionary nature of carbon reduction goals and potential compromises through
value engineering.To decarbonise the built environment at scale, it is essential
to take a comprehensive approach and work together across the value chain. This
means seeing assets as part of a larger interconnected system, breaking down
barriers across sectors, markets and jurisdictions and developing a unified
strategy. By applying decarbonisation principles early on and considering the
entire lifespan of buildings and infrastructure, it is possible to maximise
opportunities to reduce embodied carbon and minimise trade-offs.
The Australian Government, working with state and territory governments, should
develop a comprehensive national plan to actively promote the decarbonisation of
emissions embodied in Australia’s built environment, in particular by:
* linking new construction decisions to Net Zero 2050 and 2035 reduction
targets
* using the decarbonisation hierarchy to drive a clear strategy for reducing
whole-life carbon from a project’s ‘needs’ stage to lock in the greatest
opportunity to influence carbon reductions
* using lifecycle thinking to manage environmental and social impacts, minimise
carbon footprints and avoid trade-offs.
Limited understanding of decarbonisation and climate related issues across
industry along with a lack of confidence in using lower carbon materials are
obstacles to moving towards low carbon solutions. While individual projects may
see success, there is a lack of collective data to support widespread adoption
of innovative approaches.
The Austroads Environment and Sustainability Taskforce, along with the
Australian Government, state and territory governments, and New Zealand, are
actively working together to fill knowledge gaps and promote new methods for
reducing carbon in road-related infrastructure. At the same time, the Australian
Government’s investment in the Infrastructure Net Zero Initiative aims to unite
industry and government stakeholders to drive ongoing policy changes and
innovation in cutting carbon emissions from infrastructure. Decarbonisation at
scale requires education and training for professionals, trades and
consumers. Training should focus on addressing carbon literacy, specification of
low-carbon products, and construction techniques with low-carbon materials.
Sharing proven methods and project learnings can support broader knowledge
uplift across industry.
The Australian Government, with state and territory governments should build
carbon confidence and literacy for professionals, trades and consumers by:
* complementing the ongoing efforts of the Austroads Environment and
Sustainability Taskforce and the Infrastructure Net Zero Initiative to
develop education programs for professionals, trades and consumers which
target carbon literacy and low carbon product specifications and construction
* developing a national sharing platform for industry practitioners to showcase
learnings from projects, pilots, concessions, model contracts and
specifications for low carbon solutions
* piloting projects to trial new solutions and produce data about new products
and construction techniques.
Historically, Australia has lacked a nationally consistent way of measuring
embodied carbon in the built environment. Different methods are used to
calculate and claim carbon reductions and there is no single, trusted dataset
for all construction material emissions factors. Without this, it is hard to
access and compare the emissions of different products. Across Australia there
is no uniform mandates to measure and report embodied carbon.
Work is currently underway to develop standardised approaches. The National
Australian Built Environment Rating System is developing an Embodied Carbon
rating tool to enable new buildings and major refurbishments to measure, verify
and compare their upfront embodied carbon. On 7 June 2024, Australian
Infrastructure and Transport Ministers also approved the Embodied Carbon
Measurement for Infrastructure: Technical Guidance, which provides a nationally
consistent approach to measuring embodied emissions in infrastructure projects.
However, further work is needed to implement consistent measurement, reporting,
data collection and data assessment across Australia.
Decarbonisation should be based on a nationally accepted way of measuring
embodied carbon, which is supported by a national database of emissions factors
for construction materials to ensure consistency in measurement.
Policy support for measuring and disclosing upfront carbon can help industry
understand the true impact of new construction and stimulate the market for low
carbon solutions.
The Australian Government, with state and territory governments, should continue
developing a nationally standardised embodied carbon measurement system, which
allows for consistent methods to collect, measure, and assess data about
embodied carbon.
This could involve:
* establishing a national database of default emissions factors and
environmental product declarations to support embodied carbon measurement,
and be a single source of truth for practitioners in the built environment
* Setting requirements to measure and disclose upfront carbon on projects over
a threshold value and make use of collected data for setting best practice
targets informed by benchmarks for different asset classes.
* investigating ways to drive national alignment on data to support carbon
calculations, including standardising the collection of construction and
commissioning data.
A lack of consistent and continuous demand for low carbon products creates
difficulties for the development of low carbon solutions that are commercially
viable.
Companies seeking to develop lower carbon products face cost premiums, and some
domestic manufacturers have expressed concerns with carbon leakage from
high-carbon, low-cost imports.
The lack of valuation for carbon impacts in many projects results in cost-driven
decision-making during procurement, often favouring low-cost options over
initially specified low-carbon alternatives.
In December 2023, the Infrastructure and Transport Ministers’ Meeting approved a
nationally consistent set of carbon values for use in transport infrastructure
projects. As of March 2024, Infrastructure Australia requires the use of these
values in infrastructure proposal submissions. The Infrastructure
Decarbonisation Working Group, led by the NSW Government and the Australian
Government, is also developing policies to reduce embodied emissions in
transport infrastructure. This includes the creation of a ‘carbon in procurement
and contracts’ guideline to support the implementation of measures promoting
transport decarbonisation.
A nationally agreed approach for stimulating demand for low carbon solutions
would help to demonstrate consistency and reliability for the supply chain.
Funding support for the development of low carbon materials will also help to
speed up their adoption into Australia’s built environment.
The Australian Government, working with state and territory governments, should
agree a common national approach to drive market demand for low carbon
solutions.
This could involve:
* developing nationally consistent procurement guidance through the
Infrastructure Decarbonisation Working Group focused on enabling low carbon
solutions in transport project requirements
* addressing cross-border carbon leakage and ensuring a means of fair carbon
accounting between domestic and imported products, through the Australian
Government’s ongoing work to investigate a domestic Carbon Border Adjustment
Mechanism
* exploring funding or grants models to reduce the cost burden for projects to
adopt lower carbon products and technologies
* investing in sustainable finance instruments to incentivise the adoption of
low carbon materials and technologies on projects, by working with
concessional finance providers
* investigating incentives for low carbon construction with planning
authorities.
The unwillingness of the industry to embrace new project delivery approaches due
to fear of risk exposure is impeding progress in decarbonisation
The incremental effort involved in identifying risks associated with new
delivery approaches and then allocating risk to the party best placed to manage
is substantial, leading project teams to opt for traditional solutions and
conservative procurement practices.
Asset owners and contractors need to share risks and rewards to encourage the
adoption of lower-carbon solutions on projects. This could involve prioritising
decarbonisation as a metric for project success, offering shared reward
incentives through contracts, and developing new models for project delivery.
Government funded projects that support trials and pilots of new solutions would
provide data and insights to support investment decisions and increase industry
confidence.
The Australian Government, working with state and territory governments, should
develop new methods for project delivery which share risks and rewards for
innovative approaches.
This could involve:
* specifying outcomes and expectations of project delivery that embed specific
requirements for decarbonisation
* developing performance-based, collaborative contract models and business
cases, which assume the use of low carbon materials, early contractor
involvement on projects, embodied carbon analysis in pre-tender processes,
and clear direction for decarbonisation in tender documentation
* exploring opportunities to include trials of new materials in flagship
projects, and sharing learnings.
Supplier investment in low-carbon solutions is hampered by overly prescriptive
product specifications on projects, which specify that materials must meet a
certain prescriptive characteristic rather than performance outcomes. This
inhibits the entry of new materials and solutions. Slow updates to industry
standards and project specifications also mean that the pace of development will
outstrip a standard or specification’s ability to keep up with the latest
options available.Governments and private entities should transition to
performance-based specifications on projects, which focus on desired outcomes
rather than specific product characteristics. This would allow for innovative
approaches that deviate from traditional specifications and support the uptake
of lower carbon solutions on projects. Faster, more agile processes should be
introduced to ensure that standards and specifications can be updated in a
timely way.
The Australian Government, with state and territory governments, should work
with industry to drive national alignment on low-carbon expectations through
performance-based standards and specifications.
This could involve:
* establishing unified specifications and guidelines that promote the adoption
of lower-carbon products more consistently across all jurisdictions, which
should be incorporated into widely accessible model specification clauses to
enable standardised practices
* procuring using performance-based specifications, that allow for materials
and solutions to be judged on meeting performance criteria, rather than
specifying that they must be of a certain characteristic
* leading efforts to expedite the updating of standards and specifications,
developing a more efficient system and providing funding for critical updates
to keep pace with evolving options.
FOREWORD
It is with pleasure that I present this Embodied Carbon Projections for
Australian Infrastructure and Buildings report, which, for the first time, uses
our Market Capacity Program data to measure the embodied carbon intensity of
forward-looking infrastructure and buildings pipelines across a five year
period.
This report identifies that, in the near term, the biggest immediate opportunity
for lowering embodied carbon emissions lies in upfront emissions from the
manufacture and supply of materials. These easy-to-abate emissions represent
almost 2% of the yearly national total, and are addressable via low-cost and
practical decarbonisation strategies explored in this report.
In the long-term however, the decarbonisation of Australia relies on us
cultivating the optimum conditions for success, today. This means developing an
informed market that values carbon in policy, and consistently measures and
reports embodied emissions.
To this effect, we have included six recommendations for governments to consider
in the development of sectoral decarbonisation plans that will inform the
Australian Government’s Net Zero 2050 plan and 2035 carbon reduction targets.
I would like to extend my thanks to the project team whose efforts culminated in
this insightful research, and also express gratitude to all those involved
across the jurisdictions and industry for their invaluable contribution which
have enriched the depth and breadth of our findings.
Gabrielle Trainor AO
Interim Chief Commissioner
EXECUTIVE SUMMARY
This Embodied Carbon Projections for Australian Infrastructure and Buildings
report establishes a baseline for upfront embodied carbon in Australia’s built
environment. It does this by estimating the carbon impact of the forward-looking
construction pipeline for building and infrastructure from 2022–23 to 2026–27.
It finds that the built environment is directly responsible for nearly one third
of Australia’s total emissions and contributes to over half of all emissions.
Over the next five years, construction activity from the pipeline will be
responsible for producing between 37 to 64 Mt CO2e per year. Almost a quarter of
upfront emissions from construction activity over the next five years (or 2% of
Australia’s total emissions in 2022–23 can be abated at no additional cost by
employing practical decarbonisation strategies, such as material substitution.
Targeted engagement with industry and government stakeholders indicated that
this will require an informed market which values carbon in policy and
consistently measures and reports embodied emissions.
The carbon impact of the forward looking construction pipeline is based on
Infrastructure Australia’s National Infrastructure Project Database, which
aggregates project level data for buildings, transport, and utilities projects
valued over $100 million in New South Wales, Victoria, Queensland and Western
Australia, and over $50 million in South Australia, the Australian Capital
Territory, the Northern Territory and Tasmania, in addition to private building
projects with a capital value of over $25 million. To account for the effect of
project unknowns on construction material quantities and address gaps in smaller
residential projects, an additional forecast of embodied carbon emissions was
also conducted which aligns material demand quantities with estimates of
national supply levels (See Section 5: Accounting for Uncertainty: Hybrid
Analysis)
The report highlights key areas of opportunity for governments to consider in
the development of sectoral decarbonisation plans that will inform the
Australian Government’s Net Zero 2050 plan and 2035 carbon reduction targets.
CURRENT EMBODIED CARBON INITIATIVES
We note the following efforts of governments to lower embodied carbon in
infrastructure and buildings:
THE AUSTRALIAN GOVERNMENT
* Work is underway to develop nationally consistent frameworks for
decarbonising infrastructure. Under the auspices of the Infrastructure and
Transport Ministers’ Meeting, three workstreams were established to:
* develop a nationally consistent approach to measure embodied carbon for
infrastructure, which will support industry action to reduce emissions and
facilitate future benchmarking and target setting (led by Infrastructure
NSW and approved in June 2024)
* develop a nationally consistent approach to valuing carbon for economic
appraisal and policy evaluation (led by Infrastructure Australia and
approved in June 2024)
* explore policy levers available to governments to reduce embodied
emissions, including principles to support the identification of
opportunities for the national harmonisation of policies to reduce embodied
emissions, as well as inform governments’ selection of these policies (led
by Transport for NSW with the Australian Government).
The National Australian Built Environment Rating System is developing a
national framework for measuring, benchmarking and certifying emissions
from construction and building materials. This will allow building owners
to set robust and measurable targets for reducing embodied carbon in
buildings.
STATE AND TERRITORY GOVERNMENTS
* NSW Government, through Infrastructure NSW, has published a Decarbonising
Infrastructure Delivery Policy which sets expectations for NSW Government
infrastructure delivery agencies on managing carbon in public infrastructure
projects. This is supported by Measurement Guidance. In partnership with the
Environment Protection Authority, Infrastructure NSW is also developing a
monitoring framework to require infrastructure projects to report embodied
carbon and maximise the use of recycled materials.
* Infrastructure Victoria has released advice on opportunities for the
Victorian Government to reduce emissions of future public infrastructure
investments. This advice focuses on policy and guidance to address emissions
at all stages of development.
SECTION 1: INTRODUCTION
A REPORT ON EMBODIED CARBON IN AUSTRALIA’S INFRASTRUCTURE AND BUILDINGS
This report offers a combination of quantitative and qualitative analysis to
assist governments in understanding the potential for decarbonising
infrastructure and buildings, as well as the increased usage of low embodied
carbon materials in construction. These are key focus areas identified in the
Australian Government’s most recent Infrastructure Policy Statement (November
2023).1
By presenting data and insights, it seeks to inform the development of policies
aimed at reducing embodied carbon in the built environment. It also aims to
initiate discussions on potential policy levers that align with this goal, such
as the ongoing development of sector-specific plans by the Australian Government
for the decarbonisation of buildings and transport infrastructure.
It responds to three pieces of legislation:
* The Climate Change Act 2022 (Cth), which legislates a 43% reduction in 2005
national greenhouse gas (GHG) emissions by 2030, and a net zero reduction by
2050.
* The Climate Change (Consequential Amendments) 2022 Act, which legislates for
government institutions to focus on achieving emissions targets.
The Infrastructure Australia Act 2008 which requires Infrastructure Australia to
consider the impact of infrastructure proposals on Australia’s net greenhouse
gas emissions, the achievement of Australia’s GHG emissions reduction targets
and any policy issues arising from climate change that Infrastructure Australia
considers relevant to the proposal.
BASELINE MEASURES OF CARBON EMISSIONS FOR AUSTRALIA’S INFRASTRUCTURE AND
BUILDINGS
This report leverages Infrastructure Australia data to analyse the embodied
carbon emissions of Australia’s infrastructure and buildings pipeline. This
includes estimating the embodied carbon that will be produced in the next five
years if no action is taken, evaluating the potential emissions and costs
associated with using low-carbon building materials and construction methods,
and identifying barriers and government interventions that could increase the
adoption of these solutions.
Section 2: Baseline Measures of Embodied Carbon presents baseline measures of
carbon emissions produced by Australia’s infrastructure (listed below and
depicted in Figure 1):
* Emission type (embodied, operational, enabled)
* Embodied emission type (upfront, use phase, end-of-life)
* Upfront carbon (materials manufacture, transport to site, construction
process)
Also in Section 2: Baseline Measures of Embodied Carbon are the carbon and cost
impacts of using like-for-like material substitutions in government
infrastructure projects for two decarbonisation scenarios.
PROJECTIONS BASED ON FORWARD-LOOKING GOVERNMENT CONSTRUCTION PIPELINES
Embodied carbon projections in this report are based on the quantities of
construction materials demanded by the forward-looking infrastructure pipelines
of the Australian Government, and state and territory governments. These
quantities have been determined using the analytical tools of Infrastructure
Australia’s Market Capacity Program - an assumptions-based methodology that
identifies market capacity risks by analysing infrastructure project data
provided by governments, which, combined with private investment data provided
by GlobalData, reflects around 75% of market demand in the forward estimates
period.
WORKING TOWARDS NET ZERO 2050
This report offers high-level recommendations for the Australian Government to
work towards the reduction of embodied carbon from infrastructure and buildings
in support of Net Zero 2050. These recommendations aim to initiate
investigations and identification of policy levers that are best placed to
achieve this objective, and were developed following extensive consultations
with government stakeholders, industry members, and technical experts - see
Appendix for a summary of our stakeholder consultation insights.
A summary of opportunities and recommendations is included in the Executive
Summary of this report.
EMBODIED CARBON POLICY: CURRENT STATE
Throughout Australia, governments are taking steps to design and implement
policies targeting the reduction to embodied carbon in the built environment.
THE AUSTRALIAN GOVERNMENT
The Australian Government is actively working to create consistent frameworks
for decarbonising infrastructure and buildings. Three key workstreams were
established under the auspices of the Infrastructure and Transport Ministers’
Meeting:2
* Measuring embodied carbon: Infrastructure NSW has developed a nationally
consistent approach to measure embodied carbon in infrastructure. This will
aid in reducing emissions, supporting industry action, and enabling
benchmarking and target setting.
* Valuing carbon: Infrastructure Australia has developed a nationally
consistent approach to valuing carbon for economic appraisal and policy
evaluation.
* Policy levers and harmonisation: Transport for NSW, in collaboration with the
Australian Government, is exploring policy levers to reduce embodied
emissions. This includes developing principles to harmonize national policies
aimed at reducing embodied emissions and guiding governments in policy
selection.
The National Australian Built Environment Rating System is working on a national
framework to measure, benchmark, and certify emissions from construction and
building materials. This framework aims to help building owners establish
measurable targets for reducing embodied carbon in buildings.
The Environmentally Sustainable Procurement Policy aims to improve the
environmental sustainability of government procurements. The reduction in
embodied carbon in construction projects is a key metric of the policy. As of
July 2024, procurement of construction services over $7.5 million requires
suppliers to measure and report on embodied carbon reduction.
STATE AND TERRITORY GOVERNMENTS
NSW Government, through Infrastructure NSW, has published a Decarbonising
Infrastructure Delivery Policy which sets expectations for NSW Government
infrastructure delivery agencies on managing carbon in public infrastructure
projects. This is supported by Measurement Guidance. In partnership with the
Environment Protection Authority, Infrastructure NSW is also developing a
monitoring framework to require infrastructure projects to report embodied
carbon and maximise the use of recycled materials
Infrastructure Victoria has released advice on opportunities for the Victorian
Government to reduce emissions of future public infrastructure investments. This
advice focuses on policy and guidance to address emissions at all stages of
development.
OVERVIEW OF THE MARKET CAPACITY PROGRAM
This research is underpinned by Infrastructure Australia’s Market Capacity
Program, a data-driven research initiative designed to help stakeholders
understand the national infrastructure pipeline. By continuously monitoring
market conditions and capacity to deliver infrastructure, the Market Capacity
Program provides insights to inform government policies and management of
infrastructure pipelines. The Market Capacity Program was set up in response to
a request by Ministers at the Council of Australian Governments meeting of 13
March 2020.
The Market Capacity Program is underpinned by a National Infrastructure Project
Database, a central database that brings together and organises project data.
State and territory governments contribute to the database by providing regular,
comprehensive, up-to-date information. A Market Capacity Intelligence System
complements the database. This is an extensive set of analytical tools to
examine and visualise capacity across different sectors, project types and
resources. Together, this suite of tools, data and reports provide up-to-date
evidence to better understand Australia’s infrastructure pipeline and the
market’s capacity to deliver in the coming years.
ACCOUNTING FOR UNCERTAINTY
Given that Market Capacity Program analysis cannot account for future changes in
cost, schedule, or scope, Section 5: Accounting for Uncertainty: Hybrid Analysis
offers an alternate forecast of embodied carbon emissions, which considers the
effect of project unknowns on construction material quantities - for example,
resource shortages and typical project slippage. In addition, these alternative
projections address gaps in smaller residential projects, expand material
categories, and align calculated material demand quantities with estimates of
national supply levels.
SECTION 2: BASELINE MEASURES OF EMBODIED CARBON
KEY FINDINGS
Embodied carbon from construction activity in 2023 contributed 10% of
Australia’s total carbon emissions, with upfront carbon contributing 7%.
A steady reduction of upfront carbon is achievable by applying like for like
decarbonisation strategies, with potential for 23% reduction on the baseline by
2027. This roughly equates to a reduction of 9 Mt CO₂e, or 2% of Australia’s
national greenhouse gas (GHG) emissions in 2023.
The reduction of upfront carbon in the manufacturing of construction materials
and the construction process provides a short-term opportunity for policymakers
to consider in working towards Net Zero 2050.
To support decarbonisation policy design and implementation, this section
provides baseline measures of embodied carbon in infrastructure, and estimated
emissions and costs from the use of like for like material substitutions in
government infrastructure.
EMBODIED CARBON ACCOUNTS FOR 10% OF NATIONAL EMISSIONS
Australian infrastructure and buildings were projected to contribute 57% of
national carbon emissions in 2023. Of this, embodied carbon from construction
activity in the built environment represents 10% of national emissions, as shown
in Table 4.
Embodied carbon represents the sum of the GHG emissions associated with
materials and construction processes throughout the whole lifecycle of an
infrastructure or building asset, including material extraction, transportation,
manufacturing, construction, use, replacement, demolition and end of life. These
emissions are ‘locked in’ by the decisions made during the planning, design,
procurement, delivery and maintenance of new construction projects.
As Australia strives towards net zero, it is crucial to address embodied carbon,
which reflect the climate consequences of today’s construction decisions, and
embed emissions for the lifetime of the asset.
TABLE 4: BREAKDOWN OF CARBON EMISSION PROJECTIONS FOR INFRASTRUCTURE AND
BUILDINGS, 2023
EmissionDefinition
2023 emissions (kt CO2e)
Share of national emissions
EmbodiedEmissions associated with materials and construction processes used over
an asset’s life.
54,400
10%
Operational Emissions from asset use: mainly electricity and on-site combustion
of diesel and natural gas.
112,000
21%
EnabledEmissions made possible by an asset’s existence, such as diesel emissions
made possible by the presence of highways.
137,000
26%
THE IMPORTANCE OF ADDRESSING EMBODIED CARBON
While operational and enabled emissions represent a larger proportion of the
total compared to embodied carbon, there are already many initiatives targeting
them, and they can be reduced by decarbonising the electricity grid or using
green hydrogen.
Embodied carbon is much harder to abate. While some embodied carbon will reduce
as the grid decarbonises, others will not. This is because the carbon footprint
of many building products (such as steel, cement, bitumen, glass, plasterboard,
bricks and aggregates) comes from process heat and chemical emissions rather
than from electricity.
As the grid decarbonises and progress is made on reducing the operational energy
use of Australia’s buildings and infrastructure, embodied emissions are expected
to account for a greater share of an asset’s carbon footprint over its
lifecycle.
There is an opportunity for governments to increase their range of embodied
carbon reduction policies as part of efforts to decarbonise the built
environment, which have to date focused extensively on addressing operational
emissions.
FOCUSING ON UPFRONT CARBON
Embodied carbon can be divided into the different stages of an asset’s life at
which they occur.
These include:
* Upfront embodied carbon emissions, which occur at the start of an asset’s
life, up to practical completion. They include emissions from materials
production, transport, construction waste and the construction process.
* Use phase embodied carbon emissions, which occur during an asset’s life when
it is maintained, repaired, replaced and renovated. Examples include regular
fitouts of buildings, recladding of buildings and maintaining/replacing road
pavements.
* End of life embodied emissions, which occur at the end of an asset’s life.
This includes emissions from deconstruction, demolition, transportation and
waste management after the asset is no longer in use.
The analysis in this report focuses on upfront embodied carbon, defined here as
the greenhouse gas emissions and removals associated with the creation of an
asset, network or system up to practical completion.3
Figure 2 illustrates the activities underlying the infrastructure and buildings
lifecycle modules as defined by international and European standards for
lifecycle assessment of buildings and infrastructure assets.4,5,6,7,8
Activities factored into upfront carbon calculations include:
* Modules A1-A3: Manufacture of building products
* Module A4: Transport of building products to site.
* Module A5: Construction, which includes:
* land use change from land clearing
* construction waste
* construction energy
* commissioning energy.
FIGURE 2: INFRASTRUCTURE AND BUILDINGS LIFECYCLE MODULES, HIGHLIGHTING UPFRONT
CARBON
Based on data from Infrastructure Australia’s Market Capacity Program (2023),
Australia’s construction pipeline is projected to produce between 37 Mt CO₂e and
64 Mt CO₂e of upfront carbon each year, between 2022–23 and 2026–27. Of this,
buildings represent the largest share of the total upfront carbon, accounting
for approximately half of total forecast emissions in most years. This is
followed by utilities, which have the greatest variability, accounting for 14%
of forecast upfront emissions in 2022–23 and 41% in 2026–27. Finally transport
infrastructure accounts for approximately one-fifth to one-quarter of upfront
emissions in most years. In 2023, upfront carbon from building activity is
estimated to produce approximately 7% of Australia’s national emissions (see
Table 5).
TABLE 5: EMBODIED CARBON EMISSION PROJECTIONS BY LIFECYCLE MODULE, 2023
Embodied carbon emissionsDefinition
2023 emissions (kt CO2e)
Share of national emissions
UpfrontEmissions from the creation of an asset, network, or system, up to the
point of practical completion.
35,200
6.6%
Use phase Emissions from maintaining and/or refurbishing an asset.
17,800
3.4%
End-of-life Emissions from asset demolition and/or deconstruction.
1,490
0.3%
MATERIALS MANUFACTURING PRODUCES THE MOST UPFRONT CARBON
Of the activities responsible for upfront carbon emissions, the manufacturing of
construction materials (modules A1—A3 in Figure 2) account for most upfront
carbon. These activities are described in Table 6.
TABLE 6: UPFRONT CARBON PROJECTIONS FOR LIFECYCLE MODULES A1—A3, A4 AND A5, 2023
Upfront carbon emissionsDescription
2023 emissions (kt CO2e)
Share of upfront carbon emissions from infrastructure and buildings
Materials manufacture (A1-A3)Emissions from the manufacture of construction
products, from extracting, harvesting, or recovering raw materials, through to
the manufacturer’s outbound factory gate.
27,500
75%
Transport to site (A4)Transport of building products to site.
1,680
5%
Construction (A5)Emissions from asset construction including land use
change/clearing, waste, and energy (including commissioning).
7,400
20%
ACROSS ALL SECTORS, MATERIALS MANUFACTURING DOMINATES UPFRONT CARBON EMISSIONS
Materials manufacturing (modules A1—A3 in Figure 2) represents the highest
proportion of upfront carbon emissions across all sectors. This can be seen in
Figure 3, which shows a breakdown of emissions by lifecycle module for 2023–24.
FIGURE 3: UPFRONT CARBON PROJECTIONS FOR LIFECYCLE MODULES A1—A3, A4 AND A5 BY
SECTOR, FY 2023–24
The dominance of materials manufacturing in upfront carbon is most pronounced in
the buildings sector in terms of volume (21 Mt CO₂e) and in the utilities sector
in terms of share (89%). Construction is the second most significant lifecycle
stage, accounting for 9% to 28% of total emissions. The key contributors to
construction emissions vary between asset types. Some are due to construction or
commissioning energy, while others are the result of land use change. Transport
of building products to site is the least significant lifecycle module
relatively, accounting for only 2–5% of total emissions.
EMISSIONS BROADLY FOLLOW POPULATION, BUT PRIORITIES DIFFER BETWEEN REGIONS
Carbon emissions shown in Figure 4 reflect the five-year infrastructure
ambitions of each state and territory. The largest share of emissions is
forecast to come from New South Wales, followed by Victoria, Queensland, Western
Australia, South Australia, Tasmania, the Australian Capital Territory and the
Northern Territory. While these emissions broadly follow differences in
population, there are major differences in how they are made up. South
Australia, Queensland and New South Wales plan to invest heavily in utilities,
particularly utility solar. Tasmania, Western Australia and Victoria plan to
invest in transport infrastructure. The Australian Capital Territory and the
Northern Territory are focused on buildings.
FIGURE 4: UPFRONT CARBON EMISSIONS OF STATES AND TERRITORIES, FY 2024
THE POTENTIAL FOR LOW-CARBON BUILDING MATERIALS AND CONSTRUCTION METHODS
This research also investigated the carbon and cost impact of using
like-for-like, decarbonisation strategies in forthcoming public infrastructure
projects found in Infrastructure Australia’s Market Capacity Program database.
The adoption rates for decarbonisation strategies were calculated under two
scenarios, reflecting a mid-level and maximum rate of adoption The Maximum
Decarbonisation Scenario represents the highest level of ambition that industry
stakeholders felt were achievable by 2026–27, assuming that cost was not a
barrier. The Mid-level Decarbonisation Scenario uses lower uptake rates and
reduces the use of decarbonisation strategies that are particularly expensive.
Table 7 presents a summary of the different uptake rates per scenario. Section
4: Cost and Carbon Abatement Potential examines cost and carbon abatement
potential of each strategy.
TABLE 7: UPTAKE RATES PER DECARBONISATION SCENARIO
Decarbonisation strategy
Baseline*
Mid-Level Decarbonisation by 2026–27*
Maximum Decarbonisation by 2026–27*
Supplementary cementitious materials replace cement
0–35%
40%
50%
Reclaimed asphalt pavement replaces asphalt in:
* wearing course
* base course
0–10%
5–20%
0–25%
10–40%
15–25%
20–40%
Recycled crushed concrete replaces aggregates in:
* pavement subbase
* concrete
0–5%
0%
5–20%
5%
10–30%
10%
Structural steel lightweighting
0%
50%
100%
Reinforcing steel lightweighting
0%
50%
100%
Fibre reinforcing replaces mesh/bar
30%
60%
100%
Steel made in electric arc furnace with 100% renewable electricity
Grid average
50%
100%
Hydrated lime replaced in asphalt
0%
100%
100%
Aluminium made with 100% renewable electricity
Grid average
25%
50%
Biodiesel in construction
5%
10%
20%
Renewable electricity in construction
Grid average
30%
100%
* A range indicates that uptake rates vary by state and typecast.
23% OF UPFRONT CARBON FROM PUBLIC INFRASTRUCTURE COULD BE ABATED BY 2026–27
Our analysis concludes that under the Maximum Decarbonisation Scenario, the
upfront carbon emissions from public infrastructure could be 23% lower in
2026–27 with the use of like-for-like decarbonisation strategies considered in
this report – see Table 8.
TABLE 8: CARBON IMPACT FROM MAXIMUM DECARBONISATION SCENARIO AND REDUCTION
AGAINST BASELINE SCENARIO
2022–23
2023–24
2024–25
2025–26
2026–27
kt CO₂e
Change
kt CO₂e
Change
kt CO₂e
Change
kt CO₂e
Change
kt CO₂e
Change
Buildings
21,000
0%
27,000
-5%
30,000
-9%
21,000
-19%
9,900
-31%
Transport
9,800
0%
11,000
-4%
10,000
-7%
8,300
-16%
6,900
-25%
Utilities
5,300
0%
13,000
-2%
19,000
-4%
15,000
-8%
14,000
-16%
Total
37,000
0%
52,000
-4%
59,000
-7%
45,000
-15%
30,000
-23%
A 23% reduction in upfront carbon emissions from public infrastructure is
equivalent to a reduction of 9 Mt CO₂e, roughly 2% of Australia’s gross national
greenhouse gas emissions of 529 Mt CO₂e in FY 2023.9
This scenario would lead to a cost saving of $160 million (see Table 9), which
is equal to 0.14% of the total value in Infrastructure Australia’s Market
Capacity Program pipeline.
TABLE 9: CARBON AND COST CHANGES FOR THE THREE DECARBONISATION SCENARIOS IN
2026–27
Scenario
Carbon abatement
Cost
Baseline
No change
No change
Mid-level decarbonisation
13% reduction
(5.0 Mt CO₂e)
0.24% cost saving
($280 million)
Maximum decarbonisation
23% reduction
(9.2 Mt CO₂e)
0.14% cost saving
($160 million)
A breakdown of the costs of the Maximum Decarbonisation Scenario is shown in
Table 10. Replacing materials with lower-carbon alternatives results in an
overall saving in material spend as cost-saving strategies more than compensate
for those with a cost uplift. Increases in construction and commissioning costs
are due to the use of biodiesel and renewable electricity. The increase in
labour cost is due to an estimated increase in structural engineering fees to
optimise structural steel (i.e., to reduce the amount of structural steel needed
to achieve the desired level of performance).
TABLE 10: COST IMPACT FROM THE LIKE-FOR-LIKE USE OF REPLACEMENT MATERIALS, BY
INPUT (MAXIMUM DECARBONISATION SCENARIO)
Cost
Original cost ($million)
Additional cost ($million)
Change
Materials
$36,000
$-690
-1.9%
Construction
$8,300
$240
2.9%
Commissioning
$680
$85
13%
Labour
$45,000
$200
0.44%
Unaffected
$26,000
$0
0%
Total costs
$116,000
0.14%
Under the Mid-level Decarbonisation Scenario, a 13% reduction in upfront carbon
emissions is achievable with a larger cost saving of $280 million – or 0.24% of
the total project value in Infrastructure Australia’s Market Capacity Program
pipeline.
These scenarios show the significant potential for replacement materials in
lowering embodied carbon emissions in infrastructure. However, it is worth
noting that emission projections may not be realised exactly as presented as
they are subject to government ambitions, market conditions, and emissions that
occur beyond Australia’s territorial boundaries, which that may or may not
change over time.
While a 23% saving in upfront carbon would be a significant contribution to
Australia’s decarbonisation agenda, eliminating the other three quarters of
upfront carbon emissions from the construction pipeline will need a different
approach. It will need building products to be decarbonised from the supply
side, and changes in how Australia plans, designs and procures assets so that
embodied carbon is considered early. The only way to effectively reduce embodied
carbon at scale is to start early and coordinate through the value chain.
SECTION 3: BARRIERS AND OPPORTUNITIES
A conscious and concerted national effort is going to be crucial in meeting
Australia’s net zero commitments. Successful decarbonisation of the built
environment will require coordinating across the whole infrastructure planning,
delivery and operation system, and a step change in how infrastructure and
building assets are planned, built, operated, maintained and reviewed. This also
involves overcoming a series of obstacles to change.
Taking insights from our consultation with industry and government stakeholders,
this section explores obstacles to reducing embodied carbon in the built
environment and provides recommendations for the Australian Government as it
designs and implements targeted decarbonisation policies.
RECOMMENDATION 1
The Australian Government, working with state and territory governments, should
develop a comprehensive national plan to actively promote the decarbonisation of
emissions embodied in Australia’s built environment, in particular by:
* linking new construction decisions to Net Zero 2050 and 2035 reduction
targets
* using the decarbonisation hierarchy to drive a clear strategy for reducing
whole-life carbon from a project’s ‘needs’ stage to lock in the greatest
opportunity to influence carbon reductions
Using lifecycle thinking to manage environmental and social impacts, minimise
carbon footprints and avoid trade-offs
DISJOINTED OPERATING ENVIRONMENTS ARE NOT CONDUCIVE FOR ACHIEVING NET ZERO
TARGETS
The individual carbon-reduction efforts of governments are a welcome first step
on the path to national decarbonisation.
While many individual initiatives are underway, there is no overarching plan for
targeting embodied carbon in the built environment. This limits the scope for
collaboration across the built environment and linking new construction with
Australia’s ambition for a net zero transition.
At the individual asset level, decarbonising a building or infrastructure asset
is often considered without studying the implications for carbon on the wider
system that the asset belongs to. Disconnected operations or any form of tunnel
vision in decision making is a barrier to just transition, and can result in
unforeseen trade-offs or unintended social, environment and/or economic
impacts.
To address this, decarbonisation of the built environment should be addressed
using a systems-based approach and through close collaboration across the value
chain.
Using lifecycle thinking, which considers the impacts that asset owners and
managers can control and influence when assets are created, operated and used
ensures that multiple environmental and social impacts are considered across an
asset’s whole lifespan.
Asset owners should also collaborate with other members of the value chain to
speed up decarbonisation through the project delivery process. Early engagement
and collaboration among value chain members such as owners and managers,
designers, constructors, procurers and product/material suppliers is needed at
all levels, from system to asset in order to effectively reduce carbon
emissions.
APPLYING THE DECARBONISATION HIERARCHY
To maximise whole-life carbon reduction and scale up the individual efforts of
individual project teams, stakeholders should use the decarbonisation hierarchy
(see Figure 5) to evaluate need, assess alternatives, adopt low carbon
solutions, and improve. The greatest opportunity to avoid or reduce emissions
occurs at the ’need’ stage, and gradually decreases through the design,
materials selection, construction, and operation stages. Whole-life carbon can
be influenced again at the end of an asset’s first life, if/when it can be
refurbished, repurposed, deconstructed and/or decommissioned.
FIGURE 5: THE DECARBONISATION HIERARCHY ADOPTED FROM PAS 2080 (2023)
RECOMMENDATION 2
The Australian Government, with state and territory governments, should build
carbon confidence and literacy in buildings and infrastructure by:
* complementing the ongoing efforts of the Austroads Environment and
Sustainability Taskforce and the Infrastructure Net Zero Initiative to
develop education programs for professionals, trades and consumers which
target carbon literacy and low carbon product specifications and construction
* developing a national sharing platform for industry practitioners to showcase
learnings from projects, pilots, concessions, model contracts and
specifications for low carbon solutions
PILOTING PROJECTS TO TRIAL NEW SOLUTIONS AND PRODUCE DATA ABOUT NEW PRODUCTS AND
CONSTRUCTION TECHNIQUES.
Widespread climate illiteracy and a lack of knowledge sharing can delay uptake
of lower carbon materials
Australia’s decarbonisation efforts are detrimentally impacted by a general lack
of understanding among industry professionals, trades, and consumers of climate
and carbon issues (climate literacy), myths concerning low carbon materials and
an absence of detailed and actionable learnings.
As assets are built or renewed, product choices are made based on current
knowledge and perceptions developed over time. Myths about the difficulties and
impracticality of using lower-carbon materials are common, and influence project
decisions at both design and procurement stages. Where the availability, quality
and performance of low-carbon construction materials are not well understood,
hesitancy in their adoption is to be expected.
Knowledge about characteristics of low carbon products needs to be supplemented
with practical awareness and know-how on their use for a project. Lack of
confidence about specification and use results in low and fragmented demand for
low-carbon products, which slows supply chain development due to insufficient
demand, and less product availability.
Use of low-carbon products on projects often rely on substantial trials and
testing, which are essential to ensure that alternative products are fit for
purpose for their intended applications. Without evidence of multiple prior
successes, project teams may be unwilling to use lower carbon alternatives which
is problematic as test results are rarely published and case studies lack the
detail required to replicate results.
One example of efforts to address these gaps in the industry and promote
innovative building techniques in the transport infrastructure sector can be
seen in the Austroads Environment and Sustainability Taskforce, comprising the
Australian Government, state and territory governments, and New Zealand
Government. Together, they are developing guidance, conducting research, and
updating Austroads standards.
Additionally, the Australian Government has invested in the Infrastructure Net
Zero Initiative, which brings together industry and government stakeholders to
achieve the shared goal of decarbonising infrastructure. This collaboration
recognises the shared responsibility of decarbonisation and the opportunity to
create an aligned and effective use of collective time, resources, and expertise
to accelerate the highest-priority initiatives to drive lasting policy change
and industry innovation.
RECOMMENDATION 3
The Australian Government, with state and territory governments, should continue
developing a nationally standardised embodied carbon measurement system, which
allows for consistent methods to collect, measure and assess data about embodied
carbon.
This could involve:
* Establishing a national database of default emissions factors and EPDs to
support embodied carbon measurement, and be a single source of truth for
practitioners in the built environment.
* Setting requirements to measure and disclose upfront carbon on projects over
a threshold value and make use of collected data for setting best practice
targets informed by benchmarks for different asset classes.
* Investigating ways to drive national alignment on data to support carbon
calculations, including standardising the collection of construction and
commissioning data.
STANDARD MEASURES AND TOOLS ARE NEEDED FOR MEANINGFUL PROGRESS
Reducing carbon emissions at scale is only possible with reliable and consistent
measurement tools. Implementing a standard methodology and data system at
national level poses a significant challenge.
Historically, Australia has lacked a nationally consistent way of measuring
embodied carbon in the built environment. Various methods are used to calculated
and claim carbon reductions on projects, leading to a lack of consistency and
credibility in measurement, with inconsistent and non-comparable results. This
makes it difficult for stakeholders to accurately calculate and track carbon
emissions. Additionally, there is no comprehensive dataset for process-based
lifecycle analysis emissions factors, which makes it difficult to access and
compare the emissions of different building products. Furthermore, a shortage of
compliant product data, such as third party verified EPDs, which limits the
ability for decision makers to make informed low carbon choices when selecting
building materials.
Recognising the imperative to consistently measure, compare and set reduction
targets for embodied carbon in buildings, the National Australian Built
Environment Rating System (NABERS) is working to create an embodied carbon
rating tool for buildings, which would allow building owners to set robust and
measurable targets for reducing embodied carbon in buildings. In concurrence,
the Infrastructure and Transport Ministers’ Meeting has approved the Embodied
Carbon Measurement for Infrastructure: Technical Guidance, a nationally
consistent approach to measuring embodied emissions in infrastructure
projects.11 Further work will involve developing and maintaining a national
emissions factor library and nationally consistent data reporting and
collection.
RECOMMENDATION 4
The Australian Government, working with state and territory governments, should
agree a common national approach to drive market demand for low carbon
solutions.
This could involve:
* developing nationally consistent procurement guidance through the
Infrastructure Decarbonisation Working Group focused on enabling low carbon
solutions in project requirements
* addressing cross-border carbon leakage and ensuring a means of fair carbon
accounting between domestic and imported products, through the Australian
Government’s ongoing work to investigate a domestic Carbon Border Adjustment
Mechanism
* exploring funding or grants models to reduce the cost burden for projects to
adopt lower carbon products and technologies
* investing in sustainable finance instruments to incentivise the adoption of
low carbon materials and technologies on projects, by working with
concessional finance providers
* investigating incentives for low carbon construction with planning
authorities.
INDUSTRY NEEDS A STEADIER FLOW OF DEMAND TO JUSTIFY DECARBONISATION INVESTMENT
Industry is less willing to create more products and solutions that have low
carbon impact, because the demand for them is not dependable. This hinders the
advancement of the sector and the country as a whole.
Stakeholders identify several causes of demand dependability:
* The lack of common targets or incentives to drive demand for lower carbon
solutions across jurisdictions.
* A focus on upfront cost that leads to low-carbon products being descoped in
favour of lower-cost yet higher-carbon alternatives. A contributing factor is
that carbon is not currently valued in the decision-making process for many
projects.
* Suppliers not being engaged early enough in the project, limiting their
ability to provide innovative solutions that meet design requirements as well
a lower-carbon alternative. Once designs are finalised, the options for low
carbon products become more limited.
* The high cost of product trials that reduce the pool of projects willing to
undertake them.
* Leakage of carbon into Australia through higher-carbon, low-cost imports,
which deters local, low carbon product development.
Many stakeholders interviewed for this report called for fairer carbon
accounting, including the Building Products Industry Council and representatives
of the steel industry, for who carbon leakage was regarded as an item of
importance for government intervention.
In March 2023, the Australian Government announced it would undertake a review
of carbon leakage as part of the Safeguard Mechanism reforms. The review will
assess carbon leakage risks and policy options to address them, including the
feasibility of an Australian Carbon Border Adjustment Mechanism. The review will
focus on trade-exposed goods under the Safeguard Mechanism, particularly steel
and cement which are key inputs for many types of infrastructure. The review’s
first consultation paper was released on 13 November 2023 and closed on 12
December 2023. A second round of consultation will be undertaken in mid-2024.
This review is expected to be completed by 30 September 2024.
The delivery of major infrastructure projects presents a unique opportunity for
the Australian Government to drive decarbonisation outcomes. For instance, the
Infrastructure Policy Statement, released in November 2023 notes that as
emissions reduction techniques emerge, the Australian Government expects them to
be factored into project delivery. This lays a clear foundation on which project
selection funding decisions could be made in future.
There is also work underway to drive a more consistent approach to procurement.
Through the ITMM, the Infrastructure and Transport Ministers’ Meeting, the
Infrastructure Decarbonisation Working Group, chaired by NSW and the
Commonwealth, is developing a ‘carbon in procurement and contracts’ guideline to
inform the implementation of measures to ensure transport infrastructure
projects support decarbonisation goals.
To elevate the consideration of carbon in project decision making, ITMM approved
a nationally consistent set of values for use in transport infrastructure
projects. Infrastructure Australia has introduced a requirement that
infrastructure proposals submitted to Infrastructure Australia must use the
nationally consistent set of carbon values in their submissions from July 2024.
RECOMMENDATION 5
The Australian Government, working with state and territory governments, should
develop new methods for project delivery which share risks and rewards for
innovative approaches.
This could involve:
* specifying outcomes and expectations of project delivery that embeds specific
requirements for decarbonisation
* developing performance based, collaborative contract models and business
cases, which assume the use of low carbon materials, early contractor
involvement on projects, embodied carbon analysis in pre-tender processes,
and clear direction for decarbonisation in tender documentation
* exploring opportunities to include trials of new materials in flagship
projects and sharing learnings.
INDUSTRY CONFIDENCE TO INVEST IN DECARBONISATION IS LOW, FOR FEARS THAT RISKS
MAY NOT BE REWARDED
Stakeholders identified fear of risk exposure as one of the major barriers
hindering effective decarbonisation efforts. This reluctance stems from industry
inertia, where trying new approaches or technologies to reduce carbon emissions
is often seen as risky. Hesitance is further compounded by industry’s limited
bandwidth, as it contends
with numerous commercial and workforce challenges alongside the complexity of
the bidding process. Government procurement practices were reported to be
conservative, undermining the imperative to tackle climate change and adopt
progressive policies.
This inherent reluctance to take risks has also led to a resistance to pilot new
projects as well as a preference to pass on risks to other parties. This is
particularly evident in traditional contract models, where risk is typically
shifted to the constructor in post-tender D&C (design and construct) contracts.
Unfortunately, by this stage, the opportunity for significant decarbonisation in
the project has often passed, leaving the constructor with limited options for
reducing carbon.
Moreover, the aversion to risk has also hindered the willingness to try new and
innovative approaches. Many stakeholders reported that there is a preference for
familiar and low-risk solutions, instead of considering effective or innovative
alternatives. As a result, even when new and well-tested solutions are available
in other countries, there is a reluctance to adopt them in Australian projects.
This is exemplified by the use of general purpose limestone cement, which is
commonly
used overseas by not yet embraced in Australia. Overall, the apprehension
towards risk and change in the industry is seen as a barrier to decarbonisation
efforts.
RECOMMENDATION 6
The Australian Government, with state and territory governments, should work
with industry to drive greater national alignment on low-carbon expectations
through performance-based standards and specifications.
This could involve:
* establishing unified specifications and guidelines that promote the adoption
of lower-carbon products more consistently across all jurisdictions. This
should be incorporated into widely accessible model specification clauses to
enable standardised practices
* procuring using performance-based specifications, that allow for materials
and solutions to be judged on meeting performance criteria, rather than
specifying that they must be of a certain characteristic.
Leading efforts to expedite the updating of standards and specifications,
developing a more efficient system and providing funding for critical updates to
keep pace with evolving options.
PRODUCT DEVELOPMENT IS HINDERED BY TRADITIONAL STANDARDS AND SPECIFICATIONS
During consultation, industry stakeholders were frustrated by existing
specifications, which prescribed specific characteristics for products rather
than performance outcomes. This can limit the entry of new and innovative
materials into the market.
Existing construction bias and out-dated material standards and specifications
often preclude the use of lower-carbon materials, mixes and processes.
Traditionally, specifications prescribe characteristics of a compliant product,
such as a minimum required composition. These are typically narrow, focusing on
known solutions.
Another barrier to progress is fragmentation in product specifications across
jurisdictions, which discourages investment by diluting market demand. This is
further compounded by Australia’s inherent challenges of low population and
geographical spread, making it difficult to justify product changes due to
inconsistent demand for specific requirements.
The low pace of updates to standards and specifications is another significant
barrier. Stakeholders expressed frustration at the lag in updating these
standards, which makes it difficult for the industry to keep up with the latest
low carbon materials. According to some stakeholders, slow progress in the
update of existing stipulations mean that new solutions are judged on their
adherence to narrow and prescriptive specifications rather than their
performance.
As innovation in low carbon materials continues to advance, it is imperative
that measures are taken to speed up the process of updating standards and
specifications.
To overcome these barriers, it is necessary to address the issue of consistency
in product specifications at a national level. There is also a need to
transition to performance-based specifications and ensure that standards and
industry specifications are updated in a timely manner.
SECTION 4: COST AND ABATEMENT POTENTIAL
Analysis presented in Section 2: Baseline Measures of Embodied Carbon showed
that Australia can reduce upfront carbon emissions from its pipeline of
infrastructure and buildings by up to 23% in 2026–27 by applying like-for-like
decarbonisation strategies considered in this report.
The cost and carbon abatement potential of each decarbonisation strategy is
shown in Figure 6. Four of the 11 groups of strategies considered in this report
lead to a cost saving at the project level – recycled crushed concrete replaces
aggregates in concrete and pavement sub-base; reclaimed asphalt pavement
replaces asphalt in base course and wearing course; structural steel
lightweighting and hydrated lime replaced in asphalt - and one is cost neutral –
reinforcing steel lightweighting. The following remaining strategies incur a
cost, shown in red, however most costs are small compared to the value of assets
in the pipeline:
* Aluminium made with 100% renewable electricity.
* Steel made in an electric arc furnace with 100% renewable electricity.
* Supplementary cementitious materials that replace cement.
* Renewable electricity in construction.
* Steel fibre reinforcing that replaces steel mesh/bar reinforcing.
* Biodiesel in construction.
Of the strategies, biodiesel uptake is by far the most expensive, with
relatively small benefit to reducing greenhouse gas (GHG) emissions. The Maximum
Decarbonisation Scenario assumes that usage increases from 1% in 2022–23 to 20%
by 2026–27 (i.e., nationwide adoption of a B20 blend across the construction
sector. However, with current pricing, this strategy becomes expensive at the
national level. As such, the Mid-Level Decarbonisation Strategy assumes a
moderate uptake of biodiesel beyond current levels.
The strategies with the greatest influence on upfront carbon are:
* steel made from electric arc furnace with 100% renewable electricity
* reinforcing steel lightweighting
* structural steeling lightweighting
* supplementary cementitious materials replace cement
* renewable electricity in construction and commissioning.
FIGURE 6: MARGINAL ABATEMENT COST CURVE, 2026–27
SECTION 5: ACCOUNTING FOR UNCERTAINTY: HYBRID ANALYSIS
The analysis in this report is based on Infrastructure Australia’s Market
Capacity Project Database. This system aggregates project-level data to create a
comprehensive overview of Australia’s infrastructure and building investment
pipeline. This data is informed by budget processes and forward projections
derived from budget estimate periods.
However, the landscape for project delivery has become progressively
challenging, with constraints of available skilled labour and resources, market
fluctuations, and inconsistencies in project and portfolio planning standards.
Consequently, delays due to slippage are now widespread, which can lead to
over-estimation of material demand.
Further, Infrastructure Australia’s Market Capacity project database focuses on
major projects per state.
Major projects are defined as:
* infrastructure projects with a capital value of $100 million or more in New
South Wales, Victoria, Queensland, and Western Australia
* infrastructure projects with a capital value of $50 million or more in South
Australia, Tasmania, the Australian Capital Territory, and theNorthern
Territory
* private building projects with a capital value of $25 million or more
* all energy projects, regardless of capital value.
The forecast may overestimate spend - and therefore upfront carbon - in some
areas as a result of project slippage and threshold values, while
underestimating it in others.
This project applies two scenarios to manage uncertainty:
* Pipeline Analysis: Calculations are based solely on the pipeline of
infrastructure and building projects from Infrastructure Australia’s National
Infrastructure Project Database, without any scaling. Projects below the
thresholds above are excluded. Projects are reported in the year they are
forecast, without accounting for potential slippage. In practice, this means
that most of the residential housing market is excluded and that the pipeline
is too full, particularly for the next 2—3 years (meaning it cannot all be
delivered within the planned time horizon).
* Hybrid Analysis: This analysis is designed to achieve a more realistic
forecast of future embodied emissions, and represents a more comprehensive
dataset for buildings. This is done in four steps:
1. Fill gaps for buildings under $25 million
Data from the Australian Bureau of Statistics (ABS) is used to account for
construction of all buildings, regardless of their capital value.12,13
Forecasts from Master Builders Australia were used to project the ABS data
into the future.14
2. Expand the material categories for buildings
Additional materials (e.g., aluminium, glass and building services) is added
to Infrastructure Australia’s materials classification to capture more
embodied emissions from buildings.
3. Account for project slippag
Historic building approvals data from Australian Bureau of Statistics was
used to account for project slippage and project cancellations. Construction
rates for transport and utilities were not adjusted.
4. Reconcile quantities of calculated material with the market’s ability to
supply these materials
Material quantities were summed to determine the deviation from total
material supply at the national level. These comparisons were only made for
a small number of materials where data was available or could be calculated,
namely asphalt, total cementitious materials, reinforcing steel and
structural steel. Where there were significant deviations (>±10%), project
volumes were scaled to match total material demand. A rate of 5%
year-on-year growth was allowed for per material category. (The reason for
applying slippage factors first was to try to get a better balance across
the project types before scaling up/down.)
HYBRID ANALYSIS FINDINGS
Upfront carbon emissions from construction activity in Australia’s buildings and
infrastructure under the Hybrid analysis was calculated as 38 Mt CO₂e in
2022–23, the baseline for this study. This is equivalent to 7% of Australia’s
total greenhouse gas (GHG) emissions in 2022–23. Use phase embodied carbon was
estimated to be 18 Mt CO₂e, and end-of-life embodied carbon was estimated to be
1.5 Mt CO₂e (Table 11).
For detailed results of the hybrid analysis please refer to the report
Supporting Appendices: Embodied Carbon Projections for Australian Infrastructure
and Buildings.
TABLE 11: EMBODIED CARBON EMISSIONS BY LIFECYCLE MODULE, HYBRID ANALYSIS
(2022–23).
Embodied carbon emissionsDefinition
Emissions
(kt CO₂e)
Share of national emissions
Upfront Emissions from the creation of an asset, network, or system, up to the
point of practical completion
38,200
7.2%
Use phaseEmissions from maintaining and/or refurbishing an asset
17,800
3.4%
End-of-lifeEmissions from asset demolition and/or deconstruction
1,480
0.3%
Most upfront carbon emission come from manufacturing construction products.
Figure 7 provides a breakdown of upfront carbon emissions by lifecycle module.
Construction products make up 73% of upfront emissions (modules A1 to A3 in
carbon footprint standards). The remaining 27% comes from transport (module A4,
4%) and construction (module A5, 23%). In the construction phase, emissions come
from four main sources: land use change for greenfield sites, construction
waste, construction machinery and commissioning.
FIGURE 7: BREAKDOWN OF UPFRONT CARBON EMISSIONS BY LIFECYCLE STAGE USING THE
HYBRID METHOD
Figure 8 presents a 5-year view of upfront carbon emissions from the
infrastructure and buildings construction pipeline. Under the hybrid analysis,
the upfront embodied carbon in Australia’s pipeline of infrastructure and
buildings is forecast to be between 40 Mt CO₂e and 56 Mt CO₂e each year for the
next 5 years, equating to 256 Mt CO₂e. Buildings represent the largest share,
accounting for approximately half of the total forecast carbon emission (133 Mt
CO₂e). This is followed by Utilities, which accounts for approximately 28% of
the total emissions (71 Mt CO₂e). Transport infrastructure accounts for
approximately a fifth of the total (52 Mt CO₂e).
FIGURE 8: NATIONAL EMISSIONS OVER 5 YEARS (HYBRID ANALYSIS).
Figure 9 presents forecast upfront carbon using both the hybrid analysis
(lighter filled stacked bars) and the pipeline analysis (darker filled stacked
bars). The pipeline analysis shows dramatic growth in upfront carbon (high
ambition in the short-term) and then decline (projects later in the time horizon
not yet identified and committed). The hybrid analysis attempts to correct for
this variability and therefore shows steady growth over the 5-year period
between 2022–23 and 2026–27. It shows a steady increase until FY 2025, followed
by a levelling out in 2025–26 and 2026–27.
Comparing the two analyses:
The total results are similar for the years 2022–23 to 2025–26. However, the
make-up of these results is quite different. For buildings, the pipeline
analysis is skewed towards larger projects, many of which will not be built in
the forecast year. The hybrid analysis is influenced by many smaller projects,
particularly residential building construction.
The pipeline analysis shows a rapid rise in construction, followed by a decline.
The hybrid analysis is more stable over time. This is due to the difference in
underlying approach for forecasting building construction, in which the pipeline
analysis relies on self-reporting, and the hybrid analysis forecasts future
building construction activity based on past construction activity.
FIGURE 9: A COMPARISON OF NATIONAL EMISSIONS OVER FIVE YEARS USING THE HYBRID
ANALYSIS AND PIPELINE ANALYSIS
Figure 10 shows a breakdown of the emissions by project type using the hybrid
analysis for 2022–23. Detached residential buildings, multi-unit residential
buildings and utility solar are forecast to have the highest upfront carbon
footprint at the national level, with detached residential buildings in first
place, due to the sheer number constructed. The next group of project types is
state roads (Freeway/Highway), warehouse and office buildings – with state roads
and warehouses having a relatively similar forecast upfront carbon footprint in
2022–23. Wind utilities, semi-detached residential buildings, retail stores and
railway stations round out the top 10.
FIGURE 10: EMBODIED CARBON FOR THE 10 HIGHEST CONTRIBUTING TYPECASTS IN BASELINE
YEAR 2022–23 (HYBRID ANALYSIS)
Figure 11 shows the carbon and cost changes for both the hybrid and pipeline
Analysis, under the Mid-Level Decarbonisation Scenario and Maximum
Decarbonisation Scenario. According to the hybrid analysis, the Maximum
Decarbonisation Scenario is able to achieve a 21% carbon reduction on the
pipeline by 2026–27, with a cost uplift of $37 million. The more moderate
Mid-Level Decarbonisation Scenario can achieve a 12% carbon reduction on the
pipeline for a saving of $200 million.
FIGURE 11: CARBON AND COST CHANGES FROM DECARBONISATION SCENARIOS IN FY 2027
Scenario
Carbon abatement
Cost
Pipeline
Hybrid
Pipeline
Hybrid
Mid-Level Decarbonisation
13% reduction
(5.0 Mt CO₂e ↓)
12% reduction
(6.7 Mt CO₂e ↓)
0.24% saving
($280M ↓)
0.08% saving
($200M ↓)
Maximum Decarbonisation
23% reduction
(9.2 Mt CO₂e ↓)
21% reduction
(12 Mt CO₂e ↓)
0.14% saving
($160M ↓)
0.02% uplift
($37M ↑)
SECTION 6: METHODOLOGY AND ASSUMPTIONS
Methodology overview
This report calculates:
1. A baseline carbon footprint for infrastructure and buildings. The baseline
carbon footprint represents the upfront carbon that is expected to result
from Australia’s construction pipeline of buildings and infrastructure
between the financial years 2022–23 and 2026–27, if no action is taken. It
assumes that the adoption of low-carbon technologies remains at 2022–23
levels.
2. The potential to reduce this baseline carbon footprint by substituting
materials and energy with low-carbon alternatives, under two decarbonisation
scenarios. Two decarbonisation scenarios are used to represent two
technically achievable, levels of ambition for uptake of decarbonisation
strategies.
1. The mid-level decarbonisation scenario includes low-carbon technologies
that are available on the market today, have proven technological
viability, are cost competitive, and can be scaled up to the national
level by 2026–27.
2. The maximum decarbonisation scenario is designed to be an achievable best
case. It assumes that barriers in standards, procurement and cost can be
overcome. Achieving it would require strong alignment between government
and industry on low-carbon outcomes.
SCOPE
The analysis in this report is based on Infrastructure Australia’s Market
Capacity Project Database, including major projects per state, defined as:
* infrastructure projects with a capital value of $100 million or more in New
South Wales, Victoria, Queensland, and Western Australia
* infrastructure projects with a capital value of $50 million or more in South
Australia, Tasmania, the Australian Capital Territory, and the Northern
Territory
* private building projects with a capital value of $25 million or more
* all energy projects, regardless of capital value.
MATERIAL QUANTITIES
Material quantities were determined from this system, which combines forecast
capital expenditure with an overlay of the typical spend on plant, labour,
equipment and materials (PLEM) per asset type.
For this report:
* Materials data were the primary source and the basis for calculations in
modules A1-A3 and construction waste in module A5.
* Plant data were the basis for construction energy in module A5.
* Labour data were used for construction costs in module A5, where strategies
had an influence on labour costs.
* Equipment data were not used.
EMISSION FACTOR SELECTION AND CALCULATION
Emission factors were calculated to represent national or state averages
wherever possible. Emission factors were weighted using apparent consumption, as
below:
𝐴𝑝𝑝𝑎𝑟𝑒𝑛𝑡 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 = 𝐷𝑜𝑚𝑒𝑠𝑡𝑖𝑐 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛
+ 𝐼𝑚𝑝𝑜𝑟𝑡𝑠 − 𝐸𝑥𝑝𝑜𝑟𝑡𝑠
Where there were multiple domestic manufacturers or multiple import countries,
emissions were weighted by market share wherever possible. Where this
information was not publicly available, plant manufacturing capacity was used as
a proxy for market share for domestic manufacture.
UPFRONT CARBON
The analysis in this report focuses on upfront carbon defined here as the
greenhouse gas emissions and removals associated with the creation of an asset,
network or system up to practical completion. This definition is based on that
for ‘capital carbon’ from PAS 2080:2023 (BSI Australia, 2023).
Carbon emissions are calculated as the “sum of greenhouse gas emissions and
greenhouse gas removals in a product system, expressed as CO₂-equivalent (CO₂e)
and based on a life cycle assessment using the single impact category of climate
change” (ISO, 2018). Where the term carbon is used in this report, it refers to
the carbon dioxide equivalent (CO₂e) of all greenhouse gases.
Upfront carbon includes the following life cycle modules:
* Modules A1—A3: Manufacture of building products.
* Module A4: Transport of building products to site.
* Module A5: Construction, which includes:
* land use change from land clearing
* construction waste
* construction energy
* commissioning energy.
FIGURE 12: LIFECYCLE MODULES ACCORDING TO ISO 21931-1:2022, HIGHLIGHTING UPFRONT
CARBON
These lifecycle module codes (i.e., A1-A3, A4 and A5) derive from international
and European standards for lifecycle assessment of buildings and infrastructure
assets. It is worth noting that many building/infrastructure asset carbon
footprint studies do not include commissioning energy. This is an item that
emerged as being relevant for some asset types during the stakeholder
consultation process for this project. Further, land use change is often
excluded due to a lack of good data on its potential impacts. Both are included
within this study.
TWO ANALYSES FOR TWO PURPOSES
This report employs two different calculation approaches for two different
purposes:
1. The pipeline analysis calculates the emissions embodied in Australia’s
pipeline of infrastructure and buildings, as forecast. Calculations are
based solely on Infrastructure Australia’s National Infrastructure Project
Database, without any scaling. Projects that fall below the thresholds are
excluded. Projects are reported in the year they are forecast, without
accounting for slippage.
2. The hybrid analysis aims to calculate the embodied emissions that occur in a
specific year. This is done by filling gaps for building projects under $25
million, by accounting for project slippage where possible and by including
a wider range of construction products.
The purpose of the Hybrid Analysis is to demonstrate the significance of
embodied carbon relative to Australia’s total national greenhouse gas (GHG)
emissions. Its figures are presented as percentages of emissions as well as
absolute emissions. By contrast, the Pipeline Analysis is not presented relative
to national emissions because the forecast emissions may be spread across more
than one year.
CALCULATION METHOD
CALCULATING THE BASELINE CARBON FOOTPRINT
The baseline carbon footprint was calculated by summing several elements:
* Manufacture of building products = amount of construction (in $) × material
intensity (typically kg per $) × emission factor (typically kg CO₂e per kg).
* Transport of building products to site = amount of construction (in $) ×
material intensity (typically kg per $) × typical transport distance (in km)
× emission factor (typically kg CO₂e per kg·km).
* Land use change from land clearing = total land use change from construction
(in kg CO₂e) × construction per typecast (in $) / total amount of
construction (in $)
* Construction energy = operation of plant (in $ per type of plant/machine) ×
energy intensity (e.g., MJ per $) × emission factor (e.g., kg CO₂e per MJ)
* Construction waste = amount of construction (in $) × material intensity
(typically kg per $) × waste factor (%) × emission factor (typically kg CO₂e
per kg).
* Commissioning energy = amount of energy used for commissioning (in $) ×
energy intensity (e.g., MJ per $) × emission factor (e.g., kg CO₂e per MJ)
The amount of construction is total dollars per asset type (of which there are
63 types) and per state/territory. In the base analysis for the report (the
Pipeline Analysis), the amount of construction comes solely from Infrastructure
Australia’s National Infrastructure Project Database. The Hybrid Analysis uses
the same data for transport infrastructure and utilities, but bases its
buildings data on statistics from the Australian Bureau of Statistics and the
Department of Climate Change, Energy, the Environment and Water.
FORECASTING EMISSION SAVINGS
IDENTIFYING DECARBONISATION STRATEGIES
The materials available within Infrastructure Australia’s database were used as
the basis for developing an initial longlist of decarbonisation strategies.
Strategies were divided into those that affect materials/products (modules
A1-A3) and those that affect construction (module A5).
13 decarbonisation strategies were selected (in 11 groups) with different rates
and levels of adoption, from an initial longlist of 25 strategies.
Five criteria were used to select decarbonisation strategies:
* MTargets upfront carbon
Only decarbonisation strategies that had the potential to actively reduce
upfront carbon were considered.
* Like-for-like replacement
The analysis in this report focuses on like-for-like material replacement
only (i.e., intra- material substitution). It does not consider
inter-material substitution (e.g., replacing asphalt with concrete or
concrete with timber), changes in project design or changes in project
execution. This is because the data available per project type is so highly
aggregated that it is not feasible to do anything else credibly.
* Additionality of emissions savings
Emissions reductions must go beyond savings that would occur anyway due to
other existing policies or activities. Perhaps the most obvious example is
decarbonisation of the electricity grid. This analysis only considers
electricity decarbonisation that is significantly above decarbonisation of
the grid.
* Already available on the Australian market
Decarbonisation strategies either had to already be available on the
Australian market in the base year (2022–23) or to represent a change to a
product already available on the market (e.g., supply-side decarbonisation of
the energy mix for a product already on the market).
* Strong potential for decarbonisation.
The intent of this project was to identify significant opportunities for
decarbonisation nationally. As such, strategies had to have strong potential
to reduce upfront carbon and be available at scale across Australia.
For each of the 13 strategies, we consider:
* Level of uptake by 2026–27 The Maximum Decarbonisation Scenario always
assumes a level of uptake that is the same or greater than the Mid-Level
Decarbonisation Scenario.
* Change in amount of material used per asset (for efficiency strategies).
* Change in carbon intensity per unit of material (for material emission factor
strategies).
* Change in material, energy and labour costs (as relevant).
* Change in carbon intensity per unit of construction energy.
UPTAKE SCENARIOS
This analysis applies three scenarios for uptake rates of the decarbonisation
strategies. The uptake rates for the Baseline Scenario, and the maximum uptake
rate by 2026–27. under the Mid-level Decarbonisation Scenario and the Maximum
Decarbonisation Scenario can be found in Table 7 in Section 2: Baseline Measures
of Embodied Carbon. Current and future uptake rates were determined through
workshops with industry, supplemented with research by the authors. Detailed
analysis of the decarbonisation strategies can be found in the report Supporting
Appendices: Embodied Carbon Projections for Australian Infrastructure and
Buildings.
BASELINE SCENARIO
This is the base case for this report. The project team has endeavoured to
determine actual adoption rates for all decarbonisation strategies as of the
base year 2022–23. These baseline rates are then assumed for all future years
through to the final year for this analysis 2026–27. No further uptake beyond
the current rate is considered within this scenario. Emission factors are also
assumed to hold stable for each material. This means that the amount of product
forecast to be used is the only variable between years.
MAXIMUM DECARBONISATION SCENARIO
This scenario represents the highest practical level of ambition by 2026–27. It
is designed to be an achievable best case. It assumes that barriers in
standards, procurement and cost can be overcome. The main limitations on uptake
rates in this
scenario are:
* Physical impossibility
There would not be enough of the material physically available. Examples
include reclaimed asphalt pavement (RAP), recycled, content in steel and
recycled content in aluminium. There will never be enough material available
for 100% recycling rates while material demand is growing globally.
* Deterioration in performance meaning replacement is no longer like-for-like
Stakeholders commented that while it is physically possible to achieve 100%
replacement rates, this can lead to deteriorations in physical properties for
some materials, meaning that the replacement material would no longer be
functionally equivalent to original, virgin material. Examples mentioned
during consultation include SCMs in concrete at replacement rates over
60–70%, high use of RAP in pavement wearing courses, and high use of recycled
aggregates in concrete.
* Growth that outstrips capacity to supply within the next 4 years
Given the relatively short time horizon for this analysis, we also assume
that the sector cannot go from very low levels of replacement to extremely
high levels overnight because supply would be unlikely to be able to
grow fast enough.
MID-LEVEL DECARBONISATION SCENARIO
This scenario represents an intermediate level of ambition that is part way
between the Baseline Scenario and the Maximum Decarbonisation Scenario. Adoption
rates are defined by a combination of three factors:
* Moderate price
All strategies that either paid for themselves or could be achieved for a
moderate price increase were implemented. Highly expensive strategies were
eliminated (or taken up at a much lower rate to reduce cost), regardless of
their decarbonisation potential.
* Technical and regulatory feasibility
Strategies with high perceived barriers in technology and/or
regulation/standards were eliminated. So too were those with high perceived
risk.
* ‘Trickle down’ approach
Performance rates already achieved by the best-performing sectors and/or
best-performing states/territories in 2022-23 were rolled out to the
worst-performing sectors/states by 2026–27, while the best performers were
assumed to push ahead even further.
COSTING REPLACEMENT OPTIONS
The costing of decarbonisation strategies was conducted by Slattery. Slattery
contacted suppliers and contractors to obtain baseline material costs and how
these costs would change if the material was substituted. Each supplier or
contractor’s information was recorded in an Excel spreadsheet with material type
and price per tonne impact. The percentage of cost increases for materials per
state was obtained when available.
For low-carbon concrete, prices per tonne / cubic metre were not obtained.
Rather, suppliers estimated how cost would increase for a variety of concrete
products incorporating supplementary cementitious materials (SCMs) compared to
standard cement blend products. Pricing data obtained from the market was
sense-checked against Slattery’s own internal pricing data.
Once market research was completed, estimated percentage price changes were
provided for each material substitution. Where a variation in price difference
was obtained for the same material substitution, the middle value of the range
was used.
DEFINITIONS
MANUFACTURE OF BUILDING PRODUCTS (MODULES A1-A3)
Emissions from manufacturing building products are calculated from extracting,
harvesting, or recovering raw materials through to the manufacturer’s outbound
factory gate.
For recycled and reused products, the boundary between asset life cycles has
been set by applying the “end-of-waste state” defined by European standard EN
15804+A2 Sustainability of construction works - Environmental product
declarations - Core rules for the product category of construction products.15
The end-of-waste state is the point at which material stops being counted as
waste and starts being counted as a product. This boundary is important because
it defines the point at which greenhouse gas emissions from recovery and
recycling stop being counted as waste disposal in the previous asset’s lifecycle
(i.e., zero emissions in the current asset’s lifecycle) and start being counted
as the emissions of manufacture in the current asset’s life cycle.
Following EN 15804+A2, the end-of-waste state for a recovered material is
reached when it meets four criteria:16
* It is commonly used for specific purposes.
* There is market demand (i.e., someone will pay for the recovered material).
* It meets relevant technical or legal requirements, e.g., relevant standards.
* It is not classified as hazardous by relevant legislation.
In practice, this definition means that the greenhouse gas emissions from many
types of recycling will be classified as waste treatment operations at the end
of the previous asset’s life cycle (and therefore not at the start of the
current asset’s lifecycle). Exceptions include metals – particularly steel and
aluminium – where the end-of-waste state is reached as soon as the metals are
put into a (source- separated) skip on the construction site.
TRANSPORT TO SITE (MODULE A4)
Transport to site is modelled as a mixture of truck, rail and sea freight to get
materials from their original supplier to the construction site. A
consumption-based approach is applied, meaning that all freight is included,
including freight that occurs overseas.
LAND USE CHANGE (MODULE A5)
Land use change includes the greenhouse gas emissions caused by converting one
land use type to another. It applies to greenfield developments only and is not
relevant to brownfield developments (as the land has already been developed and
there is no land use change). It is particularly significant where forested
areas are cleared, or where wetlands are drained.
All land use change is assumed to occur in module A5. There was some confusion
during the stakeholder consultation process, as to whether land use change
impacts could also occur in module A0 (pre-construction).
CONSTRUCTION WASTE (MODULE A5)
Construction waste emissions are calculated as the sum of four components:
* Emissions from manufacturing wasted materials. The same emission factors are
used as for modules A1-A3.
* Emissions from transporting wasted materials to site. The same emission
factors are used as for module A4.
* Emissions from transporting wasted materials to waste treatment. A default
assumption of 50 km transport in a rigid truck is applied. The same emission
factors are used as for module A4.
* Emissions from end-of-life treatment of waste, e.g., landfill or recycling up
to the end-of- waste state (see definition of the end-of-waste state earlier
in this section).
CONSTRUCTION ENERGY (MODULE A5)
Construction energy is all energy (diesel, electricity, etc.) associated with
constructing an asset. This includes land clearing, excavation, laying
materials, erecting structures, etc. Only energy used on- site – including site
offices – is within the scope of this analysis. Activities that occur off-site
are not considered. This means that corporate offices and design offices are
excluded, as is transport of staff to and from the jobsite.
COMMISSIONING ENERGY (MODULE A5)
Commissioning is the stage in the project where an asset is tested – in whole or
in part – before being handed over to the client. It takes place between
construction completion and practical completion, though it often occurs in
stages for larger projects. Commissioning may continue following handover to the
asset owner, however the commissioning energy included in module A5 contains
only the work completed under the control of the constructor.
Typically, commissioning includes the testing of critical systems, such as
back-up electricity generators, security systems, fire systems, extractor fans
and plant rooms. Commissioning energy is typically electricity, though
significant amounts of diesel can often be used, particularly to test back- up
generators or in cases where commissioning is done when the project is still
off-grid.
GREENHOUSE GAS EMISSIONS
“Greenhouse gas emissions”, “GHG emissions”, “carbon footprint” and “carbon
emissions” are used interchangeably in this report. They are defined as the “sum
of greenhouse gas emissions and greenhouse gas removals in a product system,
expressed as CO₂-equivalent (CO₂e) and based on a life cycle assessment using
the single impact category of climate change” (ISO, 2018). Where the term
“carbon” is used in this report, it refers to the carbon dioxide equivalent
(CO₂e) of all greenhouse gases and not to elemental carbon.
GHG emissions have been calculated using Global Warming Potential over 100-year
time horizon (GWP100). GWP100 is defined by the Intergovernmental Panel on
Climate Change (IPCC). Where possible the IPCC’s latest report – the Sixth
Assessment Report (AR6) – was used.17 However, given that this report relies on
many different sources, many emission factors follow earlier reports, primarily
AR4 and AR5.18,19 This is expected to have little relevance to the results as
nearly all upfront carbon emissions associated with buildings and infrastructure
assets are carbon dioxide (CO₂) and 1 kilogram of CO₂ is characterised as 1
kilogram of CO₂-equivalent (CO₂e) across all versions of the GWP100 indicator.
GHG emissions and removals are reported separately for the Pipeline Analysis and
Hybrid Analysis in the Supporting Appendices: Embodied Carbon Projections for
Australian Infrastructure and Buildings in line with ISO 14067:2018 Greenhouse
gases - Carbon footprint of products - Requirements and guidelines for
quantification and PAS 2080:2023.20,21 The main results in the body of the
report focus on greenhouse gas emissions only.
ASSUMPTIONS
EMISSIONS ARE CALCULATED FROM THE BOTTOM UP
This report aggregates information from the bottom up and then validates it
against top-down data. The approach was chosen to improve the granularity of the
results. More specifically:
* All construction activity data is an aggregation of project-level data.
* All carbon footprint data is based on bottom-up process-based lifecycle
assessment rather than top-down input-output life cycle assessment.
Exceptions have been made where no bottom-up data were available, notably for
land use change.
CALCULATIONS FOCUS ON CONSUMPTION, NOT PRODUCTION
This report applies a consumption-based approach. This approach includes the
greenhouse gas emissions associated with materials and energy consumed within
Australia and excludes the greenhouse gas emissions from domestically produced
products that are exported.
The use of a consumption-based approach means that only a portion of the upfront
carbon reported in this study occurs within Australia’s territorial boundaries.
This is more important for some materials than others. For some products (e.g.,
photovoltaic panels), 100% of what is consumed domestically has been produced
overseas. For others (e.g., aggregates and electricity), 100% of what is
consumed here, has also been produced in Australia. For most products, there is
a mix of domestic supply and imports.
A consumption-based approach was considered appropriate for this study because
all countries share the same atmosphere, meaning that it doesn’t matter in which
country greenhouse gas emissions are released. However, it is important to
recognise that the Paris Agreement applies a production-based approach and only
considers greenhouse gas emissions from within a country’s territory.
How significant is the difference between the two approaches for this analysis?
Australia’s consumption-based emissions are typically 10-15% lower than our
production-based emissions, according to work by the Department of Climate
Change, Energy, the Environment and Water.22 These figures are net emissions,
including the effects of Land Use, Land Use Change and Forestry. Previous
analyses that have considered gross emissions – excluding Land Use, Land Use
Change and Forestry – have shown similar emissions when applying
production-based and consumption-based approaches.23
The differences between consumption-based and production-based approaches are
not likely to be significant for this analysis. Some of the forecast savings
will fall outside Australia’s territorial boundaries, however many of the
decarbonisation strategies considered will also apply to products that are
manufactured in Australia for export, helping to balance the books.
PROCESS-BASED LIFE CYCLE ASSESSMENT
There are three main ways to calculate emission factors:
1. Process-based lifecycle assessment (process-based LCA)
2. Input-output lifecycle assessment (IO-LCA)
3. Hybrid lifecycle assessment (Hybrid LCA)
Process-based life cycle assessment (process-based LCA) is a bottom-up approach
that starts from the many individual process steps required to make something
and adds them all up to calculate total emissions. Because of its detail,
process-based LCA can be used to differentiate between many different product
variants. So, for example, it is possible to distinguish between a concrete mix
with 10% fly ash and another with 20% ground granulated blast furnace slag.
However, to make the method practical, cut-off rules and/or proxies are used to
represent parts of the supply chain that are less environmentally relevant. This
leads to truncation error, meaning that not all environmental emissions are
captured.
An alternative approach is input-output lifecycle assessment (IO-LCA). IO-LCA is
a top-down approach that uses economic input-output tables to consider trade
between sectors of the economy. Each economic sector is assigned a direct
emission per dollar and the trade between sectors allows indirect emissions to
be calculated. IO-LCA is complete by definition (i.e., no truncation error)
provided that national inventories capture all direct emissions per sector.
However, it has very low resolution – at the level of market sectors only –
which means that it cannot distinguish between products from the same sector.
Hybrid lifecycle assessment (Hybrid LCA) seeks to combine the two methods and
achieve the best of both worlds. There are two Hybrid LCA databases for
construction products in Australia:
1. The Environmental Performance in Construction (EPiC) Database, published by
the University
of Melbourne.24
2. The Integrated Carbon Metrics (ICM) Embodied Carbon Life Cycle Inventory
Database, published by the University of New South Wales.25
This report uses process-based LCA as its primary method for four main reasons:
Granularity: This report includes two decarbonisation scenarios which are based
on like-for- like replacement. As such, the analysis in this project requires a
method that can distinguish between products in the same market sector. This
requirement rules out IO-LCA.
Data availability: Process-based LCA is the method used to calculate the results
in an Environmental Product Declaration and the method underpinning product
carbon neutral declarations. As such, most of the product-specific data
available in Australia (and worldwide) is process-based LCA data.
Industry support: Consultation through this process and through related projects
(e.g., National Australian Built Environment Rating System Embodied Carbon) have
shown overwhelming support for process-based LCA through the entire building and
construction supply chain.
Global standardisation: International standards for LCA and product carbon
footprinting typically rely on process-based LCA data wherever it is available.
The body of this report applies process-based LCA for all core calculations. For
comparison purposes, upfront embodied carbon emissions for 2022–23 were also
calculated using an economy-wide input-output LCA (IO-LCA) approach. This can be
found in the report Supporting Appendices: Embodied Carbon Projections for
Australian Infrastructure and Buildings.
LIMITATIONS
This analysis is limited primarily by its own scope. It does not consider:
* No-build or build-less solutions.
* Optimised design solutions.
* Inter-material substitution, e.g., concrete for asphalt, or timber for
reinforced concrete.
* Life cycle stages beyond upfront carbon, including maintenance/replacement,
end of life and emissions from users’ utilisation of the asset. The
durability of materials has only been considered insofar as to eliminate
strategies (or to lower uptake rates) to try to ensure that replacements are
like-for-like and will not comprise performance.
* Environmental impacts other than carbon footprint.
Other limitations include:
* There is limited data on project rework (i.e., where something must be ripped
out and replaced because it is out of specification). This is excluded from
the current analysis.
* There is currently no simple way to split between rural versus urban
projects. The location affects the availability of recycled bulk materials
and transport distances. In this study, the split of rural/urban population
has been used to adjust transport distances (module A4) and uptake rates try
to reflect a mix of rural and urban projects.
* Not considering cost escalation over the five-year time horizon.
* Not considering decarbonisation of the business-as-usual case over the
five-year time horizon.
APPENDIX – CONSULTATION INSIGHTS
OVERVIEW OF STAKEHOLDER CONSULTATIONS
Engaging government and industry stakeholders was an important part of this
project. The engagement ensured stakeholders:
* understood the project and what it meant for them (e.g., its aim, methods,
planned outcomes and progress) and could update their own stakeholders
* could contribute to the project (e.g., explain decarbonisation activities and
challenges for their sector, provide feedback on issues identified, provide
data, suggest areas to explore further).
FIGURE 13: EXTENT OF STAKEHOLDER ENGAGEMENT IN THE PROJECT
FIGURE 14: KEY MESSAGES FROM STAKEHOLDERS
SUPPLY CHAIN INSIGHTS
Stakeholders consulted during the project provided insights into the many
constraints across the supply chain for low-carbon materials. They highlighted
the need to innovate, coordinate and break down silos. The most common supply
chain frustrations stem from:
* the absence of a national built environment net zero pathway,
* poor planning and coordination,
* pervasive inertia and conservatism, and
* lack of certainty and incentives to innovate.
These challenges are also present in the larger value-chain, within which the
supply chain operates. Section 3: Barriers and Opportunities examines the
barriers to and enablers of decarbonising the value- chain. This section
provides examples to illustrate the most common supply chain constraints
identified by the industry stakeholders who produce, supply, procure and install
low-carbon materials.
The constraints to using low-carbon products identified through consultation can
be grouped into six broad categories: geography, resource availability,
availability of low-emissions power, technical constraints, economic
barriers, and regulations.
GEOGRAPHY
Infrastructure Australia’s Replacement Materials report shows that geographical
limitations hinder the use of lower-carbon replacement materials, such as
recycled crushed glass, recycled crushed concrete, and supplementary
cementitious materials.26 These materials are not widely available due to
logistical reasons, resulting in difficulty for stakeholders in accessing them.
The high costs and associated transport emissions also counteract the potential
carbon reduction. Availability of resources varies between states and between
metropolitan and regional areas within the same state. The pavement industry
reports that there is a lack of clean and suitable volumes of reclaimed asphalt
pavement near to manufacturing facilities, and there is limited plant capacity
to process in many locations.
Constructors too reported logistical challenges and cost impacts of sourcing
lower-carbon ‘waste’ materials, because it is difficult to access these
materials near new construction sites.
RESOURCE AVAILABILITY
LIMITED SUPPLY OF RECYCLATE
Limited availability of recyclate hinders production of lower
carbon building products, as many stakeholders reported.
Reasons for this scarcity varied among industries.
The plastic pipe industry said that despite being able to incorporate recyclate
into non-pressure pipes, there is a low volume of waste pipe available for
recycling. Since plastic pipes are long-lived (up to 100 years), post-consumer
recyclate is scarce, which limits production of lower-carbon plastic pipe and
conduit.
Similarly, steel and aluminium producers struggle with limited recyclate
availability, with much of Australia’s aluminium recyclate being sent offshore.
This impacts their competitiveness in terms of both price and lower-carbon
production. The recycled content in Australian aluminium is predicted to remain
at less than 5% for the next five years, so Australian producers will continue
to rely on imports to manufacture high recycled content building materials.
Despite having the capability to process
recycled steel, Australian steel manufacturers face insufficient steel scrap on the global
market to meet demand.
The concrete and pavement industries also struggle with sourcing quality recyclate, with shortages reported by asphalt producers for
materials such as recycled crushed glass and crushed and screened reclaimed
asphalt pavement. The concrete industry said that growing demand for
supplementary cementitious materials threatened the future supply of lower
carbon concrete mixes, unless grinding capability increased in line with that
demand.
LIMITED SUPPLY OF BIOBASED ALTERNATIVES
Bio-based alternatives are available to replace many fossil-based materials and
processes, but using them on a large scale for low carbon building products
remains challenging.
The plastic pipe industry reports that the available volume of alternative raw
material sources is limited and costly, even though bio and circular resins that
may be ‘dropped into’ existing production processes are commercially available.
The steel industry is also exploring biochar as an alternative to coke in steel making, but sourcing sufficient quantities to meet industry demand is difficult. Additionally, combining bio-based and fossil-derived materials in production
systems may not produce a clearly recognisable biobased product, making it necessary to declare the entire product mix as one in Environmental Product Declarations.
NATIVE FOREST TIMBER
The timber industry expressed concern that the negative narrative around forest
management may lead to reduced supply of responsibly sourced low-carbon timber
products. Logging in native forests is set to be banned in Victoria and Western
Australia in 2024, and a court action to halt logging is currently underway in
Tasmania and New South Wales. Hardwood from Australia’s native forests is
typically made into flooring, decking, window frames, beams and joists.
AVAILABILITY OF LOW-EMISSIONS ENERGY
A decarbonised supply chain is reliant on low-emissions power generation to
manufacture and transport low carbon materials. Until a spread of
cost-competitive, low-emissions electricity is available, with capacity to
support 24-hour operations, high-emitter industries will struggle to produce
low-emissions solutions.
The supply of low-emissions power generation extends to capital investment
decisions too. For example, the aluminium industry said that the single biggest
factor in developing future refining, smelting and manufacturing locations is
reliable, internationally competitive, low emissions energy.
Constructors face similar challenges in decarbonising on-site operations.
Biodiesel blends can be used to help power site generators and diesel machinery,
but constructors said that supply is limited. In some cases it made more sense
(commercially) to offset construction emissions with carbon credits. The ability
to use ‘sustainable’ biodiesel to decarbonise construction activities is
constrained by the lack of local commercial production facilities, as Australian
feedstocks are exported. Imported biodiesel is subject to the full fuel excise
and therefore uncompetitive with standard diesel.
TECHNICAL CONSTRAINTS
Existing construction biases and conservative materials standards often limit new and innovative materials, mixes, and processes. For example, although hydrated lime can reduce the
carbon footprint of asphalt, it is only permitted for Northern Territory roads. Asphalt
suppliers felt that the cost of additional testing required for reclaimed
asphalt pavement mixes was ‘a tax on choosing the right mix’ which can limit
uptake of a market-ready low-carbon solution.
The concrete industry faces frustration with overly restrictive standards for supplementary cementitious materials and conservative engineering specifications that
lead to higher
emission
outcomes. Suggestions for harmonised national standards have been made, allowing
for the uptake of alternative materials at scale. For example, state
specifications permit different rates of fly ash; Western Australia specifies
the recovery rate of generated fly ash at 72%, compared to 18% in Queensland and
10% in New South Wales.
Despite successes with buried thermoplastic pipes in other countries and a trial in Australia, the plastic pipe industry has faced difficulties negotiating with Australian road authorities and
traditional higher
carbon products are still favored. Furthermore, the timber industry has concerns about
the current treatment of biogenic carbon at end of life reported in
Environmental Product Declarations (EPD), following an update to EN15804+A2.
They question the factual accuracy of the standard, and perceive that it limits
the selection of low-carbon timber solutions due to the way the standard
requires its carbon footprint to be expressed.
ECONOMIC BARRIERS
Stakeholders highlighted commercial constraints to supplying low carbon
products, citing examples such as steel manufacturers needing funding for plant
upgrades and research initiatives to produce higher grade steels by 2026–27.
Producers struggle to justify capital investment due to limited or inconsistent demand, hindering the implementation of processes for producing lower-carbon products.
For example, the concrete industry said that they could implement processes to
produce lower-carbon products now if there was enough demand to justify the
investment. Likewise, the pavement industry said that capital costs to upgrade
asphalt plants to provide lower-carbon asphalt would need to be justified
commercially before a commitment could be made to invest.
With no strong market driver for low carbon products, national net zero targets
must be embedded in the built environment for innovative solutions to thrive.
The market’s reluctance to pay a premium for some low carbon products is also a
major disincentive, stifling innovation and limiting uptake.
Constructors noted that many start-ups struggle to introduce their products to
the construction industry, due to a lack of carbon literacy and understanding of
testing and quality assurance requirements. This can result in failure to
penetrate the market, even with good, low-carbon products.
Additionally, obtaining EPDs can be prohibitively expensive for small to medium enterprises and start-ups, further constraining the introduction of viable low
carbon products to the market.
REGULATIONS
Industry stakeholders stressed that requirements for regulatory licensing of
recycling infrastructure limits their ability to receive, store and process
‘waste’ materials. The ability to store ‘waste’ on site depends on approvals at
significant cost and often the storage volumes and timeframes are inadequate.
For example, asphalt suppliers said that the Environmental Protection Authority
(EPA) will not allow on-site storage of replacement materials for use in
products.
Producers said that when they are classified as a waste receiver, there are
regulatory barriers to the use of the recycled or waste content in their
products. Regulatory reform is needed to re-classify resources that are
currently classified as ‘waste’ so that they can be used as a feedstock.
A producer of non-cementitious building products said that the EPA could do more
to pressure the waste industry to clean up waste streams destined for the
building products sector. Access to more clean ‘waste’ can help increase the
supply of these low-carbon products.
The pavement industry is frustrated at the lack of alignment in regulatory
requirements and standards among state and territory roading authorities and the
reluctance to adopt technologies and practices that have been proven elsewhere
in the world. Stakeholders feel that statutory authorities are reluctant to
listen to them, which prevents them from sharing their local expertise, and
promoting the uptake of viable low-carbon innovations.
The pavement industry is frustrated that state and territory roading authorities
will not align regulatory requirements and standards where practical or adopt
technologies and practices that have been proven elsewhere in the world.
Stakeholders feel their local expertise regarding viable low-carbon innovations
is overlooked by statutory authorities.
The aluminium industry argues that Australia’s Critical Minerals List should be
changed to include bauxite, alumina, and aluminium. The industry says this would
stimulate investment in refining, smelting and processing these critical
minerals in Australia, and support clean energy technologies and electricity
network infrastructure. The Australian aluminium industry is not at capacity,
and as noted above, most of Australia’s scrap aluminium is shipped offshore at a
time when there is an increasing demand for recycled aluminium and low-carbon
aluminium products.
APPENDIX – POLICY LEVERS
LEVERS AVAILABLE TO GOVERNMENTS TO ADDRESS UPFRONT CARBON AT THE PROJECT LEVEL
Australia will rely on every sector to decarbonise at scale to support the net
zero transformation. The built environment is directly responsible for one-third
of Australia’s total carbon emissions, and indirectly responsible for over half
of all emissions. Policies that help the built environment to address upfront
carbon at the project level will contribute to the national Net Zero 2050 goal.
The analysis in this report shows that national, state and territory governments
can make decisions to drive down Australia’s carbon emissions today.
Policy-makers and teams delivering construction projects have effective
interventions that will change how Australia constructs its
built environment.
IDENTIFYING REALISTIC AND IMPORTANT GOVERNMENT LEVERS
Industry and government have identified many areas for the government to act on
upfront carbon in infrastructure and buildings.
ASSESSMENT CRITERIA AND PROCESS
A two-step process based on two criteria led to the recommended areas of focus:
1. Criterion 1 (ability): how well the action can reasonably be adopted in
policy or practice
At step one of the process, representatives from government departments and
agencies refined proposed lists of policy interventions and non-policy
levers. These were then ranked based on how challenging they would be to
implement successfully. They also identified interventions that lacked
agreement.
2. Criterion 2 (effectiveness): how well the action will help decarbonise the
built environment at both pace and scale.
At step two of the process, the Technical Reference Group reviewed the
grouped lists and voted on how important or significant the actions are to
decarbonisation. Their votes were translated into high, medium and low
importance.
DEALING WITH ‘ADDITIONAL’ TOPICS
Further engagement with stakeholders later in the project saw other
opportunities emerge. This report includes the opportunities that more than one
stakeholder raised. ‘High importance’ means several stakeholders raised the
opportunity. The additional opportunities are classified as ‘not rated’, meaning
they have not been assigned a difficulty
or importance.
Figure 15 summarises the most promising opportunities identified for government
intervention, based on importance and agreement on options as a possible
government priority.
FIGURE 15: MOST PROMISING OPPORTUNITIES IDENTIFIED FOR GOVERNMENT INTERVENTION
IN CONSULTATION WORKSHOP
HOW POLICY CAN SUPPORT DECARBONISATION OF THE BUILT ENVIRONMENT
The opportunities for government action fit broadly into nine categories:
CARBON IN DECISION-MAKING
Upfront carbon must be assigned value in the decision-making process for
projects, such as in tender evaluations. Valuing reductions in carbon means it
can be weighted against other criteria such as price, quality and delivery.
A major barrier to using low-carbon products, or reusing existing buildings or
materials, is a perception of unreasonable cost. However, if there is a clear
priority to reduce carbon in all projects, this becomes another ‘necessary
cost’, much like buying products that comply with codes and standards.
Creating a perceived value for low-carbon commodities can encourage more reuse
and retrofits. It can also promote taking a whole-life carbon view for an asset,
which protects against possible trade-offs.
STANDARDS AND SPECIFICATIONS
Industry often cites the content of existing standards and specifications as a
major factor that inhibits using low-carbon products. They raise two challenges:
a lack of national agreement and consistency, and the need to update standards
and specifications to support low-carbon purchasing.
NATIONAL AGREEMENTS AND CONSISTENCY
The best way to support low-carbon construction is by setting consistent
requirements that are included in all similar standards and specifications.
Performance-based specifications allow for more innovative and flexible
approaches. Confirming common expectations across national and sub-national
jurisdictions helps create the consistent demand and volume that supply chains
need to change.
UPDATING STANDARDS AND SPECIFICATIONS
The process for updating standards and specifications needs a systemic overhaul.
Updates are often slow and arduous and create a barrier to innovation and
change. New, more agile approaches to updates will encourage using lower-carbon
solutions on construction projects.
A more open approach to other forms of compliance, which include identifying and
managing risks, can encourage industry to trial newer solutions more quickly.
Government should also consider more requirements to disclose high-emissions
products through EPDs and material passports.
ASSESSING EMISSIONS
A national approach to measuring upfront carbon involves adopting common
principles, methodologies, emission factors and reporting mechanisms nationally
and across all states and territories. This approach will create a consistent,
credible way to decarbonise the built environment nationally over time and make
it possible to compare different projects.
DISCLOSURES
A national methodology would enable the disclosure of upfront carbon for
infrastructure and building projects. This will make it easier to understand the
impacts of construction and continue to investigate the best levers to reduce
it. Disclosure using agreed methods to measure the upfront carbon in
construction, will help everyone understand what is possible and encourage a
‘race’ to reduce emissions which can be publicly monitored and measured.
Disclosure will also show the progress being made and make it possible to refine
actions to help achieve national and sub-national goals.
SETTING TARGETS AND BASELINES
To help Australia reach its decarbonisation targets, managing and reducing the
upfront carbon in infrastructure and buildings must be planned and deliberate.
Carbon and energy management plans for construction projects are an important
part of the carbon reduction toolkit. Requiring these plans for all
government-funded projects and assets will ensure better decisions and action
early in projects.
Consistent ways of measuring lead to baselines people trust. Setting targets for
upfront carbon in construction will increase the potential for change in the
built environment’s footprint. Targets are a better option than a carbon ‘cap’.
Firstly, they are not seen as a ‘cap’. This is because some stakeholders view
caps as unnecessary constraints where site conditions and other factors may make
it hard or impossible to reach targets.
Carbon ‘budgets’, based on targets, can be allocated for projects or even parts
of the pipeline. This makes it easier to take an holistic view about what is
possible within the constraints of decarbonising.
MONITORING AND REPORTING
Upfront carbon for developing assets should be seen as part of a wider Scope 3
emissions picture. Stakeholders wanted to see larger entities reporting their
Scope 3 emissions. This would put more focus on upfront carbon and all the other
carbon emissions that a company can influence.
Many stakeholders also wanted the National Construction Code (NCC) to include
reporting of upfront carbon.
GOVERNMENT PROCUREMENT
The Australian Government, and state and territory governments have the largest
buying power in the built environment, and the greatest commercial influence for
change. Government policies and agencies need to lead changes in low-carbon
procurement and leaders in the private sector need to support this. National,
state and territory procurement strategies must be set to match net-zero
policies, and support decarbonisation to achieve agreed targets.
Industry reported that government projects typically avoid risk and lack
ambition. A systemic change would see making decarbonising a national priority.
It also means seeing the work involved in leading low-carbon construction and
setting minimum standards for government-leased buildings as a necessary
investment.
SUPPORT FOR SUPPLY CHAINS
Supporting manufacturers in hard-to-abate sectors with both incentives and
disincentives for change is a cornerstone of government policy. This is
important and must be continued and strengthened. Manufacturers also raised
reducing carbon leakage as an opportunity.
Industries experiencing challenges with technological constraints are seeking
new ways to lower their carbon emissions. Several stakeholders suggested that
using ‘waste’ streams as raw material resources could be a promising way to
decarbonise. However, regulatory constraints on how waste is classified,
processed, and stored and how end-of-life products (resources) classified as
‘waste’ can be used has delayed developing lower-carbon products by years.
Stakeholders also identified opportunities to provide cleaner, more consistent
recyclate, such as recycled crushed glass. This would allow more processing of
reused materials to make construction products instead of using new raw
materials.
FUNDING AND INCENTIVES
The Technical Reference Group saw introducing a national value for carbon as an
important impetus for decarbonisation. Some stakeholders said that it was not a
‘price’ as a tradeable commodity that was needed. Rather, it was an agreed value
for carbon to use in business cases and decisions to prioritise
decarbonisation.
Industry calls for government funding to support decarbonisation reflected the
challenges of price premiums for low-carbon products and the possible benefits
of offering incentives to decarbonise. Stakeholders raised the expense of
research and development to create new products as a barrier, together with the
rigorous testing needed to prove they are fit for purpose. A further suggestion
was the development of sustainable finance instruments to support infrastructure
projects.
EDUCATION AND AWARENESS
Government and the private sector, large and small entities, commercial and
consumer, do not understand decarbonisation as well as they need to. Education
is one of the greatest missing links. It should cover simple fundamentals and
case studies that highlight best practice, and help people develop the
techniques they need to design, specify and install for low-carbon
construction.
Industry identified an opportunity to partner with government to develop urgent
solutions to this issue.
Industry also requested a guide which combines the findings of this project with
information about how to build low-carbon infrastructure and buildings.
ACTING FASTER OFFERS THE GREATEST POTENTIAL FOR DECARBONISATION
Governments across Australia are already acting on many of the issues raised in
this report, to varying extent. However, more progress is needed.
The most urgent actions identified by the consultation, that should be acted on
before
2025, include:
DECARBONISATION MEASURES IN POLICY
* Align national policy and make it consistent.
* Confirm a nationally harmonised approach for principles, definitions,
methodology, database (a national framework).
* Measure and disclose upfront carbon for all buildings and infrastructure.
* Require carbon and energy management plans for all big build projects.
* Require reporting of Scope 3 emissions for all major entities.
* Facilitate on-site waste (resource) storage and processing.
* Amend waste regulations to allow simpler ways to use ‘waste’ resources.
REQUIREMENTS FOR GOVERNMENT ASSETS AND GOVERNMENT-FUNDED PROJECTS
* Include weighted embodied carbon targets in business cases and tender
evaluations.
* Align national standards and specifications and make them consistent.
* Use government projects as the exemplar for low-carbon construction.
* Use government procurement to signal a change in practices.
* Recognise the end-of-life value of products.
* Offer incentives for adaptive reuse and retrofitting.
* Be willingness to pay for lower-carbon products.
* Include whole-life carbon to factor in durability and lifespan.
* Require mandatory Environmental Product Declarations for emissions-intensive
products.
PROVIDING GOVERNMENT SUPPORT TO PROMOTE AND INFLUENCE CHANGE IN INDUSTRY
* Fund education and training programs.
* Create a national carbon price.
* Create Commonwealth Treasury sustainable finance instruments for
infrastructure.
* Fund R&D to develop, improve and age-test low-carbon products.
* Complete a fuller analysis of decarbonisation methods not included in this
report.
* Develop a guide on how to build low-carbon infrastructure and buildings.
* Require waste industries to provide cleaner waste streams.
GLOSSARY
TermDefinitionAggregatesAggregates for concrete comprising small stones, gravel
and sand.AssetPhysical entity forming part of a network and/or system that has
potential or actual value to an organisation and its stakeholders.Asset
owner/managerOrganisation that manages and is responsible for providing,
operating and maintaining a buildings and infrastructure network or
asset(s).Attributable emissionsGreenhouse gas emissions from services, materials
and energy flows that become the product, make the product and carry the product
or service through its life cycle.Baseline Scenario for what carbon emissions
and removals would have been in the absence of planned measures aiming to reduce
emissionsBiodieselA liquid fuel derived from vegetable oils or animal fats.
Biodiesel can be blended and used in many different concentrations, from B5,
which is 95% petroleum diesel and 5% biodiesel, all the way up to B100, which
is pure biodiesel.BiofuelAn alternative fuel that is developed from biological,
natural, and renewable sources. Biofuels are an attractive option due to their
high energy density and convenient handling and storage properties. Biofuels can
be used on their own (with some precautions or restrictions) or blended with
petroleum fuels.Biogenic carbonCarbon removals associated with Carbon
Sequestration into biomass, including natural building materials (e.g. timber)
as well as any emissions associated with this Carbon Sequestration.Brownfield
siteAn industrial or commercial site that is idle or underused because of real
or perceived environmental pollution. Built environmentCollection of human-made
or induced physical objects located in a particular area or region.Capital
carbonGreenhouse gas emissions and removals associated with the creation and
end-of-life treatment of an asset, network or system, and optionally with its
maintenance and refurbishment.Carbon Border Adjustment MechanismAn emerging set
of trade policy tools that aim to prevent carbon-intensive economic activity
from moving out of jurisdictions with relatively stringent climate policies and
into those with relatively less stringent policies. Carbon budgetEstimated
amount of whole-life carbon a system can emit.Carbon dioxide equivalents
(CO2-e)A measure that quantifies the global warming effect of different
greenhouse gases in terms of the amount of carbon dioxide that would deliver the
same global warming effect.Carbon intensityThe amount of CO2e emitted as a unit
of production or output e.g., per $ revenue, full-time equivalent or m2 floor
area.Carbon leakageA loss of competitiveness and/or relocation of trade-exposed,
emissions-intensive industries as a result of carbon penalties applying in some
countries but not others. Carbon leakage includes potential increases in global
emissions due to import substitution and lost future investment in existing or
new businesses.Carbon management Assessment, reduction and removal of greenhouse
gas emissions during the planning, optioneering, design, delivery, operation,
use, end of life (and beyond) of new, or the management of existing, assets,
networks and/or systems.Carbon offsetsAn action intended to compensate for the
emission of CO₂e into the atmosphere as a result of industrial or other human
activity, especially when quantified and traded as part of a commercial
scheme.Carbon uptake
(Recarbonation/ Carbonation)Cement recarbonation or concrete carbonation refers
to the process where CO2 is absorbed by concrete during its use and end-of-life
phase. The amount absorbed is significant but less than the total emitted in
cement production.Carbon capture use and storageCarbon capture, utilisation and
storage – also referred to as carbon capture, utilisation and sequestration –
describes processes that capture CO2 emissions from industrial sources and
either reuses or stores it, so it will not enter the atmosphere.CO2CO2 stands
for carbon dioxide. It is a colourless, odourless, and non-combustible gas. It
is a greenhouse gas that contributes to global warming. Formed by complete
combustion of fossil fuels (coal, charcoal, natural gas, petroleum) and
CO2-containing products (such as limestone).Electric arc furnaceA furnace that
heats materials using electricity. Embodied carbonGreenhouse gas emissions
associated with materials and construction processes throughout the whole life
cycle of a building or infrastructure being the sum of upfront carbon, in-use
embodied carbon, and end-of-life embodied carbon, measured by CO2e.Embodied
energyThe total energy necessary for an entire product life cycle including raw
material extraction, transport, manufacture, assembly, installation,
maintenance, repair, disassembly, replacement, deconstruction and/or
decomposition. This includes renewable and non-renewable energy.
Embodied energy does not correlate to embodied carbon.Emissions factorAmount of
greenhouse gases emitted, expressed as carbon dioxide equivalent (CO₂e) and
relative to a unit of activity.Emissions reductionQuantified decrease in
greenhouse gas emissions specifically related to or arising from an activity
between two points in time or relative to a baseline.Enabled emissionsThe
emissions generated from third parties using infrastructure. Examples include
vehicles driving over roads and chemical processes occurring in factories. In
practice, it is difficult to set a boundary on what is enabled by the built
environment and what is not. This analysis assumes that primary industries
(e.g., mining, agriculture and forestry) and solid waste treatment (e.g.,
landfills) are not significantly enabled by the built environment.End of
lifeStage which begins when the asset has reached the end of its design life and
is ready for refurbishment, retrofit, disposal, dismantling, etc., and ends when
the asset is recycled, reused, recovered or returned to nature (combustion,
deterioration).Environmental Product DeclarationAn independently verified and
registered document that communicates transparent and comparable information
about the life-cycle environmental impact of products and services in a credible
way.
An Environmental Product Declaration is compliant with the standard ISO 14025
and is known as a Type III environmental declaration.Decarbonisation hierarchyA
decision-making hierarchy which identifies potential opportunities for managing
and reducing whole life emissions for projects and programmes of work in the
built environment. Value chain members are required to demonstrate that they
have taken into account actions which ‘avoid’, ‘switch’ and ‘improve’.Global
Warming Potential (GWP)Global Warming Potential is a measure of how much heat a
greenhouse gas traps in the atmosphere relative to carbon dioxide (CO2). It has
been developed to compare the global warming impact of different gases. The
Global Warming Potential depends on how effective the gas is at trapping heat
and how long it stays in the atmosphere before it breaks down.Greenfield siteAn
area of land that has never previously had buildings on it or been used for
industryGreenhouse gas intensityFor a product, the total GHG emissions released
in energy consumption for production and overhead, GHG emissions released by
transport used for business travel and additional GHG emissions from the
production process divided by the value of the product (i.e., the total factory
gate price). Refer also to Carbon Intensity.Greenhouse gasesGreenhouse gases are
those gaseous constituents of the atmosphere, from both natural and
anthropogenic sources, which contribute to the greenhouse effect, as detailed in
the Intergovernmental Panel for Climate Change Glossary. Greenhouse gas
emissions are often referred to as ‘carbon emissions’ in general usage.Life
Cycle AssessmentAn analysis of the environmental and/or social impacts of a
product, process or a service for its entire life cycle. It looks at the raw
material extraction, production, manufacture, distribution, use and disposal of
a product.Life cycle stagesDefined stages throughout the life cycle of a
building or infrastructure including the product stage, construction process
stage, use stage, end of life stage and benefits and loads beyond the building
or infrastructure life cycle, as outlined in EN 15978.Nature-based
solutions Actions to protect, sustainably manage and restore natural or modified
ecosystems that address societal challenges effectively and adaptively,
simultaneously providing human well-being and biodiversity benefits.Net
zeroReduction of anthropogenic greenhouse gas emissions to zero or to a residual
level that is consistent with reaching net zero emissions in eligible 1.5 °C
pathways (hence time-bound) and neutralizing the impact of residual emissions
(if any) by removing an equivalent volume of carbon.Network Combination of
interconnected assets (buildings and infrastructure) that provide services
(e.g., water, power, transport) to society as part of a wider system.Net zero
carbonNet-zero is used throughout this document with respect to the industry and
its products and relates to the reduction of CO2 emissions, across the whole
life cycle, to zero. Carbon capture by industry at industrial plants is included
in actions to reduce carbon emissions to zero. Offsetting measures such as
planting trees or other nature-based solutions are not included in the
calculations to get to net-zero.Operational carbonThe emissions associated with
energy used to operate the building or in the operation of
infrastructure.Programme of works Defined set of projects related to the
construction, maintenance, operation and/or end of life of an asset, network or
system.Reclaimed asphalt pavement (RAP)Removed and/or reprocessed pavement
materials containing asphalt and aggregates. RAP does not contain a detectable
quantity of coal tar or asbestos.Recycled crushed concreteConcrete composed of
rock fragments coated with cement with or without sands and/or filler, produced
in a controlled manner to close tolerances of grading and minimum foreign
material content.Renewable energyRenewable energy is energy that is produced
from renewable sources such as energy from wind, hydro, solar, geothermal, tide,
waves and biomass.Scope 1 emissions
GHG emissions released to the atmosphere as a direct result of an activity, or
series of activities at a facility level. Scope 1 emissions are sometimes
referred to as direct emissions. Examples are:
* emissions produced from manufacturing processes;
* emissions from the burning of diesel fuel in trucks;
* fugitive emissions, such as methane emissions from coal mines
* production of electricity by burning coal.
Scope 2 emissionsGreenhouse gas emissions released to the atmosphere from the
indirect consumption of an energy commodity. For example, ‘indirect emissions’
come from the use of electricity produced by the burning of coal in another
facility.
Scope 2 Emissions from one facility are part of the Scope 1 Emissions from
another facility.Scope 3 emissions
Indirect GHG emissions other than Scope 2 Emissions that are generated in the
wider economy. They occur as a consequence of the activities of a facility, but
from sources not owned or controlled by that facility’s business.
Some examples are extraction and production of purchased materials,
transportation of purchased fuels, use of sold products and services, and flying
on a commercial airline by a person from another business.
Also referred to as supply chain emissions.
Supplementary cementitious material (SCM)Supplementary cementitious material, or
clinker substitutes, are a wide range of materials that can be used to replace
part of the clinker in cement. They can either be blended with cement or used
directly in concrete batching. They can be naturally occurring materials,
industrial byproducts, or manufactured products. Examples include ground
granulated blast furnace slag, fly ash, silica fume, calcined clays (metakaolin)
and natural pozzolans (high-silica volcanic ash and pumice).SystemCollection and
interconnection of all physical facilities and human interactions that are
operated in a coordinated way to provide a particular service.Upfront
carbonUpfront carbon: the greenhouse gas emissions and removals associated with
the creation of an asset, network or system up to practical completion.Value
chainOrganisations and stakeholders involved in creating, operating and managing
assets and/or networks.Whole-life carbonThe total of all Greenhouse gas
emissions and removals, both operational and embodied, over the lifecycle of an
asset, including its disposal. Potential benefits or loads from future energy
recovery, reuse and recycling are reported separately.
ENDNOTES
1. Department of Infrastructure, Transport, Regional Development,
Communications and the Arts, Infrastructure Policy Statement, DITRCA,
Canberra, available via
https://www.infrastructure.gov.au/sites/default/files/documents/infrastructure-policy-statement-20231114.pdf
2. Department of Infrastructure, Transport, Regional Development,
Communications and the Arts, 2023, Communique for Infrastructure and
Transport Minister’s Meeting, DITRCA, Canberra, available via
https://www.infrastructure.gov.au/sites/default/files/documents/itmm-communique-9-june-2023.pdf
3. British Standards Institution 2023, PAS 2080: 2023 Carbon Management in
Buildings and Infrastructure (2nd), BSI, available via
https://www.bsigroup.com/en-GB/our-services/product-certification/product-certification-schemes/pas-2080-carbon-management-in-infrastructure-verification/
4. European Standards, 2011, EN 15978:2011 Sustainability of construction
works - Assessment of environmental performance of buildings - Calculation
method, EN, available via
https://www.en-standard.eu/bs-en-15978-2011-sustainability-of-construction-works-assessment-of-environmental-performance-of-buildings-calculation-method/
5. European Standards, 2022, EN: 17472:2022 Sustainability of construction
works - Sustainability assessment of civil engineering works - Calculation
methods, EN, available via
https://www.en-standard.eu/une-en-17472-2022-sustainability-of-construction-works-sustainability-assessment-of-civil-engineering-works-calculation-methods/
6. International Organization for Standardization, 2022, 21931-1:2022
Sustainability in buildings and civil engineering works - Framework for
methods of assessments of the environmental, social and economic
performance of construction works as a basis of sustainability assessment -
Part 1: Buildings, ISO, available via
https://www.iso.org/standard/71183.html#:~:text=This%20document%20provides%20a%20general,the%20sustainability%20assessment%20of%20buildings.
7. International Organization for Standardization, 2019, 21931-2:2019
Sustainability in buildings and civil engineering works - Framework for
methods of assessment of the environmental, social and economic performance
of construction works as a basis for sustainability assessment - Part 2:
Civil engineering, ISO, available via
https://www.iso.org/standard/61696.html#:~:text=This%20document%20identifies%20and%20describes,environmental%2C%20social%20and%20economic%20performance
8. British Standards Institution 2023, PAS 2080: 2023 Carbon Management in
Buildings and Infrastructure (2nd), BSI, available via
https://www.bsigroup.com/en-GB/our-services/product-certification/product-certification-schemes/pas-2080-carbon-management-in-infrastructure-verification/
9. Australian Department of Climate Change, Energy, the Environment and Water
2023, Quarterly Update of Australia’s National Greenhouse Gas Inventory:
June 2023, Australian Government, viewed 18 January 2024,
https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-gas-inventory-quarterly-update-june-2023
10. British Standards Institution 2023, PAS 2080: 2023 Carbon Management in
Buildings and Infrastructure (2nd), BSI, available via
https://www.bsigroup.com/en-GB/our-services/product-certification/product-certification-schemes/pas-2080-carbon-management-in-infrastructure-verification/
11. Department of Infrastructure, Transport, Regional Development,
Communications and the Arts, 2024, Communique for Infrastructure and
Transport Minister’s Meeting, DITRCA, Canberra, available via
https://www.infrastructure.gov.au/sites/default/files/documents/itmm-communique-7-june-2024.pdf
12. Australian Bureau of Statistics, 2023. Building Approvals, Australia (July
2023), ABS, Canberra, viewed 18 January 2024,
https://www.abs.gov.au/statistics/industry/building-and-construction/building-approvals-australia/latest-release
13. Australian Bureau of Statistics, Customised Report for DCCEEW: Building
Approvals [Non-residential Buildings].
14. Master Builders Australia 2023, Building and Construction Industry
Forecasts - Australia - September 2023, Master Builders Australia,
available via
https://masterbuilders.com.au/product/national-forecast-september-2023/
15. European Standards, 2019, BS EN 15804:2012+A2:2019 Sustainability of
construction works - Environmental product declarations - Core rules for
the product category of construction products, EN, available via
https://www.en-standard.eu/bs-en-15804-2012-a2-2019-sustainability-of-construction-works-environmental-product-declarations-core-rules-for-the-product-category-of-construction-products/
16. European Standards, 2019, BS EN 15804:2012+A2:2019 Sustainability of
construction works - Environmental product declarations - Core rules for
the product category of construction products, EN, available via
https://www.en-standard.eu/bs-en-15804-2012-a2-2019-sustainability-of-construction-works-environmental-product-declarations-core-rules-for-the-product-category-of-construction-products
17. Intergovernmental Panel on Climate Change 2021, Climate Change 2021: The
Physical Science Basis, Contribution of Working Group I to the Sixth
Assessment Report of the Intergovernmental Panel on Climate Change, IPCC,
available via https://www.ipcc.ch/report/ar6/wg1/
18. Intergovernmental Panel on Climate Change, 2007, Climate Change 2007: The
Physical Science Basis. Contribution of Working Group I to the Fourth
Assessment Report of the Intergovernmental Panel on Climate Change, pp.
129-234, Cambridge University Press, Cambridge, UK
19. Intergovernmental Panel on Climate Change, 2013, Climate Change 2013: The
Physical Science Basis. Constribution of Working Group I to the Fifth
Assessment Report of the Intergovernmental Panel on Climate Change, pp.
659-740, Cambridge University Press, Camberidge, UK
20. International Organization for Standardization, 2018, 14067:2018 Greenhouse
gases — Carbon footprint of products — Requirements and guidelines for
quantification, International Organization for Standardization, ISO,
available via https://www.iso.org/standard/71206.html
21. British Standards Institution 2023, PAS 2080: 2023 Carbon Management in
Buildings and Infrastructure (2nd), BSI, available via
https://www.bsigroup.com/en-GB/our-services/product-certification/product-certification-schemes/pas-2080-carbon-management-in-infrastructure-verification/
22. Australian Department of Climate Change, Energy, the Environment and Water
2022, Quarterly Update of Australia’s National Greenhouse Gas Inventory:
March 2022. Australian Government, viewed 18 January 2024,
https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-gas-inventory-quarterly-update-march-2022
23. Yu, M., Wiedmann, T., Crawford, R., & Tait, C. 2017, The carbon footprint
of Australia’s construction sector, Procedia Engineering Vol 180 (2017),
p221-220, available via
https://rest.neptune-prod.its.unimelb.edu.au/server/api/core/bitstreams/cd926f5d-7281-5f80-814a-3b2f5c249300/content
24. Crawford, R., Stephan, A., & Prideaux, F. 2019, Environmental Performance
in Construction (EPiC) Database. University of Melbourne, Melbourne,
available via
https://msd.unimelb.edu.au/research/projects/current/environmental-performance-in-construction
25. Wiedmann, T., Teh, S. H., & Yu, M. 2019, ICM Database - Integrated Carbon
Metrics Embodied Carbon Life Cycle Inventory Database. UNSW, Sydney,
available via
https://researchdata.edu.au/icm-database-integrated-inventory-database/1957145
26. Infrastructure Australia 2022, Replacement Materials – Understanding the
market for replacement materials across major infrastructure road projects,
Infrastructure Australia, Sydney, available at
https://www.infrastructureaustralia.gov.au/publications/2022-replacement-materials-report
27. Australian Aluminium Council, 2023, Sustainability Data Tables 2000 to
2022. Australian Aluminium Council, viewed 18 January 2024, available via
https://aluminium.org.au/sustainability/
28. European Standards 2019, BS EN 15804:2012+A2:2019 Sustainability of
construction works - Environmental product declarations - Core rules for
the product category of construction products, EN, available via
https://www.en-standard.eu/bs-en-15804-2012-a2-2019-sustainability-of-construction-works-environmental-product-declarations-core-rules-for-the-product-category-of-construction-products/
* Valuing emissions for economic analysis
Key Findings
Download report
File name
Please select your organisation type - Select -Education / AcademiaFederal
GovernmentGeneral PublicIAIndustryLocal GovernmentMedia / JournalismOtherPrivate
SectorState Government
Leave this field blank
* Valuing emissions for economic analysis
Key Findings
Download report
File name
Please select your organisation type - Select -Education / AcademiaFederal
GovernmentGeneral PublicIAIndustryLocal GovernmentMedia /
JournalismOtherPrivate SectorState Government
Leave this field blank
Introduction and context Australia’s Infrastructure Market Capacity The
Infrastructure Investment Program (IIP) Business case trends & insights Trend 1
Trend 2 Trend 3 Trend 4 Trend 5 Trend 6 Post completion evaluations to better
understand IIP performance References
ANNUAL PERFORMANCE STATEMENT 2024
Download a PDF of the full report or read the full report below
--------------------------------------------------------------------------------
26 April 2024
INTRODUCTION AND CONTEXT
PURPOSE OF THIS STATEMENT
As required under section 5DB of the Infrastructure Australia Act 2008 (Cth) (IA
Act), Infrastructure Australia, during each financial year, must give to the
Minister and table in both Houses of Parliament:
* an annual budget statement to inform the annual Commonwealth budget process
on infrastructure investment; and
* an annual performance statement on the performance outcomes being achieved by
states, territories and local government authorities in relation to the
infrastructure investment program and existing project initiatives funded by
the Commonwealth.
CONTEXT
In 2022, the Australian Government undertook an Independent Review of
Infrastructure Australia. Following the release of the Government’s response to
the Review, Parliament passed legislative amendments to the IA Act in December
2023. This included the requirement for Infrastructure Australia to produce and
publish these annual statements.
With the passage of the amendments occurring late in 2023, the Annual
Performance Statement 2024 was developed using readily available data within the
time available.
THE ANNUAL PERFORMANCE STATEMENT 2024
This first edition of the Annual Performance Statement sets out Infrastructure
Australia’s advice regarding the outcomes being achieved in relation to the
Australian Government’s Infrastructure Investment Program (IIP), which funds
land
transport projects.
Agreed performance outcomes and measures across the nationally significant
infrastructure sectors within Infrastructure Australia’s remit are yet to be
determined. As a result, this year’s Performance Statement focusses on the IIP
and its alignment to the outcomes sought through the Government’s Infrastructure
Policy Statement (IPS).
Infrastructure Australia will work with the Australian Government to agree an
approach to reporting in future editions of the Annual Performance Statement,
including considering the establishment of performance outcomes and measures for
the sectors in Infrastructure Australia’s remit.
The Statement also includes market capacity analysis and trends and insights
gleaned from Infrastructure Australia’s evaluation of business cases for
nationally significant infrastructure for consideration in the development of
future infrastructure proposals.
AUSTRALIA’S INFRASTRUCTURE MARKET CAPACITY
Infrastructure Australia’s 2023 Market Capacity Report found that Australia’s
major public infrastructure pipeline had slightly smoothed over the preceding 12
months, with projected expenditure more evenly distributed over the
forward estimates.
In November 2023, the Australian Government announced changes to projects funded
through one of its programs feeding into the public infrastructure pipeline, the
IIP. The changes included allocation of additional funds, removal of funds, and
deferral of funds. Infrastructure Australia has undertaken analysis to determine
the effects of these changes on the public infrastructure pipeline.
Infrastructure Australia’s analysis below assumes a conservative position that
all defunded projects are not going ahead, with this scenario resulting in a
2.3% reduction in the 5-year public infrastructure demand pipeline. However, in
reality, some projects may still proceed at the discretion of each respective
state and territory, without an Australian Government funding contribution.
Furthermore, the Australian Government’s cashflow contribution to the 5-year
public infrastructure demand pipeline via the IIP is approximately 20%, with the
remainder mostly comprising state and territory funding, including many projects
which are not receiving Australian Government funding. Therefore, the impact of
the announced changes to the IIP on public infrastructure construction capacity
constraints will be properly understood after infrastructure pipelines from each
state and territory have been updated.
Scenario
5-year total demand
(2023 to 2028)
% Change from baseline
2023 Public infrastructure pipeline
$282.8 billion
baseline
with projects scaled by additional funds
$286.1 billion
1.2%
with defunded projects removed
$276.4 billion
-2.3%
Pipeline with net IIP funding changes
$279.8 billion
-1.1%
Under the assumption that all defunded projects will be cancelled, the revised
IIP will slightly relieve the labour shortage in coming years. Labour demand for
publicly funded projects will reduce by up to 8,000 full-time equivalents per
month, representing up to 2% of current labour demand in 2024-25.
Figure 1: Public infrastructure workforce demand
The announced changes also reduces quarried materials demanded, although the
effect of this impact will be in later years as its impact takes effect during
the construction phase of project delivery. By 2027-28, annual quarry demand in
the public pipeline drops by up to 3%, or up to 1.2 million tonnes per year.
Figure 2: Public infrastructure quarried material demand
Global supply chain pressures have eased, with steady improvements in
international production, trade, and transport measures compared with 12 months
ago. However, demand still significantly outweighs supply, and productivity for
the construction sector remains stagnant compared to other industries.
The analysis above demonstrates that revisions of proposed infrastructure
pipelines can have material effects on managing market capacity and supporting
performance of the infrastructure construction market.
As part of normal yearly budget processes, Infrastructure Australia recommends
governments carefully review their project pipelines, both within and across
sectors. These reviews should ensure that demand is carefully matched to supply
of plant, labour, equipment and material. This will ensure that governments are
not competing against each other for scarce resources and provide a checkpoint
for projects’ progress.
THE INFRASTRUCTURE INVESTMENT PROGRAM (IIP)
The Australian Government’s over $120 billion infrastructure pipeline aims to
improve the productivity of Australia’s land transport networks by working with
every state and territory to build much-needed infrastructure across a number of
individual funding programs.1 The infrastructure pipeline comprises the IIP,
financial assistance grants, equity, and other infrastructure investments.
INFRASTRUCTURE INVESTMENT PROGRAM OBJECTIVE
The IIP, which comprises the majority of the infrastructure pipeline’s funding,
‘supports economic growth, makes travel safer, increases transport access and
supports regional development. It increases the efficiency, productivity,
sustainability and safety of Australia’s land transport infrastructure through
programs and policy to improve connectivity for communities and freight.’2
RECENT REFORMS
The Australian Government recently undertook two significant reviews relating to
its infrastructure investment – the Independent Strategic Review of the IIP, and
the Independent Review of the National Partnership Agreement on Land Transport
Infrastructure Projects.
The reviews recommended wide-ranging reforms to the Government’s infrastructure
investments, including but not limited to:
* Implementing a long-term, integrated approach to planning, incorporating the
IPS
* Developing a comprehensive outcomes and performance framework
* Taking a risk-based approach to project oversight
* Reviewing the National Land Transport Act 2014 and maintenance funding
* Improving data and systems practices
Infrastructure Australia supports the recommendations from both reviews. It is
anticipated that as the reviews’ recommendations are implemented, such as those
related to improved performance reporting, additional data will be available to
support future performance statements.
IIP CONTEXT
Within the IIP, the breakdown between the funding parties comprises 60% from the
Australian Government, with 39% from state and territory governments, and the
remaining 1% coming from other sources, such as local governments.i
FUNDING SPLIT
i. Figures provided by the Department of Infrastructure, Transport, Regional
Development, Communications and the Arts. Includes IIP major projects with
funding from 2023-34 (excluding unallocated funding) and excluding sub-programs
of Black Spot, Heavy Vehicle Safety and Productivity, Bridges Renewal, and Roads
to Recovery.
In terms of the modal breakdown of its investment, 69% of Australian Government
funding (2023-24 to 2032-33) in the IIP is committed to road projects, with 25%
allocated to rail infrastructure. The remaining 6% of funding is committed to
the remainder of the IIP.ii Australian Government investment in infrastructure
also occurs outside of the IIP on both road and rail infrastructure, for example
Inland Rail.
ii. Figures provided by the Department of Infrastructure, Transport, Regional
Development, Communications and the Arts. Includes unallocated funding to
applicable states. Also includes national unallocated funding which is held
against the road allocation.
AUSTRALIAN GOVERNMENT INVESTMENT ALLOCATION BY MODE
THE INFRASTRUCTURE POLICY STATEMENT (IPS)
Future investments in the IIP will be guided by the Government’s IPS, which was
released in late 2023. The IPS, in addition to defining nationally significant
infrastructure, identifies three strategic themes that encapsulate the benefits
the Government seeks from its infrastructure investments:
* Productivity and resilience – seeking to improve the ability of Australians
to move around and between cities, towns and regions, and to strengthen the
resilience and efficiency of transport networks.
* Liveability – connecting people with where they live and work, supporting
vulnerable communities, providing better opportunities in lower socioeconomic
areas and improving the safety of the nation’s transport networks.
* Sustainability – reducing transport and infrastructure emissions for private
users and freight movements through design, construction and operation.
PERFORMANCE OF THE IIP AGAINST THE IPS
Infrastructure Australia undertook analysis of a subset of projects within the
IIP to understand the alignment of the Government’s existing IIP investments
with the policy outcomes in the IPS. It should be noted that for most, if not
all of the projects we analysed, the IPS was not in place at the time funding
decisions were made. The purpose of this analysis is therefore to demonstrate
where governments may wish to focus future decision-making to help achieve the
IPS outcomes.
WHAT INFRASTRUCTURE AUSTRALIA ASSESSED
The purpose of Infrastructure Australia’s analysis was two-fold and aimed at
understanding projects’:
1. expected economic return (based on the business case), and
2. alignment of the projects’ benefits with the Government’s IPS.
The analysis is based on Infrastructure Australia’s previous evaluations of
project business cases. The business case data was developed by the relevant
state or territory governments and provides a ‘before construction’ view of
anticipated project benefits, as opposed to realised ‘after construction’
benefits. The analysis therefore gives an indication of the expected benefits of
projects at or around the time decisions to fund them were made.
The data was considered current at the time Infrastructure Australia evaluated
the business cases and does not account for any subsequent cost increases or
scope changes. The data represents Infrastructure Australia’s position on the
expected project benefits at the time the business case
was evaluated.
The analysis is limited to projects within the IIP that have:
1. An Australian Government commitment of $250 million or more, and
2. An Infrastructure Australia evaluation of the business case.
Filtering out program and unallocated funding, 44 projects were deemed in scope
and analysed.iii As they comprise significant projects within the IIP, this
subset of projects provides a good foundation for analysis.
To undertake this work, Infrastructure Australia sourced data from the business
case evaluation summaries (available on the Infrastructure Australia website)
and analysed this data against the themes in the IPS.
iii. 17 rail & public transport projects; 27 road projects
INFRASTRUCTURE AUSTRALIA’S FINDINGS
OVERALL, THE PROJECTS ANALYSED DEMONSTRATE A POSITIVE ECONOMIC RETURN
According to business case data, Infrastructure Australia found that the
analysed projects were expected to deliver a positive economic return, with a
forecast return of $1.17 of economic value for every $1 of infrastructure
spending nationally.iv Rail and public transport projects were found to have
slightly lower economic returns, $1.13 for every $1 invested, compared to roads,
$1.32 of economic return. This is because road business cases count higher
productivity benefits, which are a greater share of overall benefits, while rail
and public transport projects offer greater liveability and sustainability
benefits.
iv. The economic return is the average of projects’ core Benefit Cost Ratio
results, excluding wider economic benefits, weighted by the relative value of
projects to represent a true economic return.
It is important to note that the economic analysis of a project is only one of
several key inputs into Infrastructure Australia’s evaluations. Other
significant and important considerations when making infrastructure investment
evaluations include the proposal’s:
1. Strategic fit – is there a clear rationale for the proposal?
2. Societal impact – what is the proposal’s value to society, the environment
and the economy?
3. Deliverability – can the proposal be delivered successfully?
PRODUCTIVITY COMPRISES ALMOST THREE QUARTERS OF PROJECT BENEFITS
Infrastructure Australia’s analysis found that productivity is the main driver
of project benefits in the projects analysed, comprising 73% of project
benefits.
RAIL AND PUBLIC TRANSPORT PROJECTS DEMONSTRATE HIGHER LIVEABILITY AND
SUSTAINABILITY BENEFITS
Across the projects, liveability comprised 24% and sustainability 3% of project
benefits. Rail and public transport projects demonstrate higher liveability and
sustainability benefits than road projects, representing 64% of projected
liveability benefits and 65% of sustainability benefits, despite representing
only 46% of the projected cost of the analysed projects.
RAIL AND PUBLIC TRANSPORT VS ROAD BENEFITS
IMPROVING THE CONSIDERATION OF SUSTAINABILITY BENEFITS IN BUSINESS CASES NEEDS
URGENT ATTENTION
Sustainability benefits comprise 3% of project benefits, however this is not a
true representation of the potential sustainability benefits of the projects
analysed because:
* Typically, there is a low quality of sustainability evidence provided in
business cases – particularly as business cases often do not describe a
project’s:
* emission reduction targets
* mitigation, avoidance and/or offset measures, and
* intentions to use recycled/ low emissions building materials.
* Sustainability has not necessarily been a core objective of the projects
(outcomes are usually focused on transport access, connectivity and
place-making).
* Greenhouse gas (GHG) emissions baseline and savings in construction and
operations, including embodied emissions, are often not included in
cost-benefit analysis (CBA).
* Sustainability issues, such as recycled content or third-party sustainability
certification requirements, are typically only considered later in the
project development lifecycle (usually in procurement
or construction).
Improvements to the quality and detail of sustainability data provided in
business cases are required to accurately understand the sustainability benefits
of proposals. This is discussed further under Trend 4 – Inconsistent assessment
of sustainability and resilience, in the Trends and Insights section below.
BUSINESS CASE TRENDS & INSIGHTS
Based on our experience evaluating business cases, we have identified six trends
in project planning processes where there are opportunities to improve and
support future Australian Government infrastructure investments.
TREND 1
TREND 1: PROJECT SCOPES ARE INCREASING
Projects are growing in scope, scale, complexity and cost. Not only are projects
getting bigger, the number of megaprojects (valued at over $1 billion) as a
proportion of state and territory infrastructure pipelines is also increasing.
This is backed up by Infrastructure Australia’s 2023 Market Capacity data, which
shows the rapid increase in infrastructure pipelines over recent years, and
jurisdictional reports showing the growing average size of projects.4,5,6,7,8
Across jurisdictions, project reporting shows that high value projects are more
at risk of failing cost and time indicators, compared to other, lower value
projects.7,5,9 Megaprojects are inherently more complex and riskier,10 and a
growing national pipeline of megaprojects puts pressure on public and private
sector delivery capability – heightening risks of cost overruns and schedule
delays.
Infrastructure Australia’s experience in evaluating business cases has also
identified that as well as a rising number of megaprojects, increasingly large
projects are incorporating additional scope that is unrelated to the core
problem the project was intended to solve. This risks eroding value for money
where the planning context and strategic rationale for the additional scope is
not robustly justified – for example, active transport add-ons to motorway
investments that are not well planned, not sufficiently interconnected with
local pedestrian and bike networks and/or are not demonstrated to have demand.
Ensuring that project scopes, and any subsequent changes, are consistent with
the original investment objective is critical to achieving the performance
objectives of the IIP and the IPS.
TREND 2
TREND 2: LACK OF STRATEGIC PLANNING
Although jurisdictions have infrastructure strategies and long-term
infrastructure pipelines, business cases for individual projects often do not
consider the impact of project delivery and staging on that state or territory’s
infrastructure program as a whole.
There is a disconnect between strategy and delivery, with individual project
delivery decisions and implications not being considered in the context of the
infrastructure pipeline, such that sequencing and coordination of individual
projects is not maximising fiscal, delivery and investment outcomes regionally,
state and nation-wide.
Infrastructure Australia’s 2023 Market Capacity data demonstrates that one in
three megaprojects are planned to be delivered within 50 kilometres of at least
one other megaproject. The density of nearby megaprojects is likely to result in
hyper-localised shortages and supply risks that require integrated planning.
This analysis incorporates the private and public project pipeline,
demonstrating that a market-wide lens needs to be taken to understand demand and
supply chain constraints.
Corridor planning and medium-term delivery planning are needed so that
project-level outcomes and program-wide objectives can be better realised.
Initiatives by the Australian Government to encourage a corridor approach to
project planning and 10-year infrastructure plans by jurisdictions for land
transport infrastructure will help. Ensuring alignment of business cases with
these strategies is critical for reducing competition between interrelated
projects within the same corridor and highlighting the trade-offs between market
capacity and delivery pipeline. It can also achieve benefits from the
infrastructure sooner, as well as minimising disruption due to uncoordinated
processes leading to prolonged delivery and interface risks. Ensuring business
cases choose an appropriate base case that includes committed and funded
projects will highlight whether projects target the same beneficiaries and
benefits.
To reduce cost pressures on projects and ensure outcomes are achieved,
investment decisions should consider broader market capacity pressures and the
interrelationship between projects, rather than considering each project in
isolation.
TREND 3
TREND 3: BUSINESS CASES ONLY ASSESS ONE OPTION
In an analysis of 77 business cases submitted to Infrastructure Australia, 53%
had only considered one option in detail. The Infrastructure Australia
Assessment Framework (IAAF), which is consistent with the majority of national,
state and territory guidelines for business case development, recommends at
least two options are assessed in a business case. At least two feasible options
for detailed development in the business case enables a rigorous and defensible
analysis to determine the most appropriate investment response.
NUMBER OF OPTIONS ASSESSED IN BUSINESS CASES
Evidence from some states and territories likewise indicates insufficient
consideration and analysis of alternative investment options in the development
phase of projects. For instance, project assurance reviews in NSW conducted in
the 2021 and 2022 financial years identified ‘Quality of business cases’ as the
worst area of performance among 6 critical recommendation themes. These reviews
also highlighted deficiencies in the identification of alternative investment
options (including consideration of both infrastructure and non-infrastructure
interventions) and associated analysis of their respective benefits.9
Similar issues were identified in a Victorian review of major transport project
business cases, which concluded that – while the development of project business
cases was generally consistent with relevant government requirements and
guidelines – the majority of reviewed projects did not include sufficient
consideration and analysis of alternative investment options and their
benefits.7
Another trend Infrastructure Australia sees in ‘options analysis’ (Stage 2 of
Infrastructure Australia’s assessment process) and ‘business case’ (Stage 3 of
Infrastructure Australia’s assessment process) submissions is that non-build
options such as regulatory or technological solutions are often discarded early
in the development phase. This leads to a preference for building new
infrastructure rather than using what already exists more efficiently.
Appropriately considering retrofits and/or demand management solutions can avoid
GHG emissions during construction, environmental impacts, and community and
business disruption costs. It may also lead to lower-cost solutions with smaller
market capacity impacts.
Assessing more than one option in the detailed business case helps to achieve
the most efficient infrastructure investment that bests support Government’s
objectives, such as emissions reduction, productivity enhancement or regional
connectivity. Considering more than one option increases the transparency of
analysis by clearly comparing the societal and sustainability benefits that may
be achieved in individual options. For example, an alternative option may be
readily delivered using recycled content or a ‘no-frills’ scope that minimises
embodied emissions. Regulatory interventions (such as road pricing) might also
offer additional benefits such as encouraging public transport use and reduce
GHG and noxious vehicle emissions.
Business cases which only assess one option remove government’s ability to
properly consider alternatives and determine if the investment is the best use
of taxpayer dollars. Often, an expensive ‘megaproject’ is brought forward for
investment decision with no alternative, lower-cost options for comparison,
which compromises the decision-making process and leads to a less diverse
project mix within the investment program overall, thus increasing the program’s
size and risk.
TREND 4
TREND 4: INCONSISTENT ASSESSMENT OF SUSTAINABILITY AND RESILIENCE
ASSESSING GHG EMISSIONS
In response to changes to the IA Act in September 2022, Infrastructure Australia
has developed and published a Guide to assessing greenhouse gas emissions, which
sets out Infrastructure Australia’s requirements for project proposal
submissions to consider the impact of infrastructure emissions on Australia’s
national targets.
Since 2022, Infrastructure Australia has evaluated 14 transport business cases,
representing a total outturn cost of $40.5 billion. Until recently, the quality
of evidence to support assessment of emissions impacts has been lacking.
While all 14 business cases since 2022 provided evidence that the project
reduced GHG emissions due to decreased or improved vehicle travel times or modal
shift to rail, only 4 business cases recognised and monetised the disbenefit of
increased vehicle GHG emissions from additional (induced) demand. As
Infrastructure Australia’s Guide to Assessing GHG Emissions points out,
including the positive impact on emissions of travel time savings and
decongestion, while ignoring the corresponding negative impact of induced demand
on increasing vehicle emissions, misrepresents the sustainability credentials of
major infrastructure projects.
In terms of embodied carbon from construction, only 1 business case monetised
embodied impacts as part of economic analysis, 6 business cases only
qualitatively described them, and 7 omitted embodied impacts altogether.
Embodied carbon is important to quantify and include in CBA because it can
represent up to 90% of GHG emissions from the construction and operations of
transport projects.v,11,12,13 Quantifying embodied carbon in the early stages of
project development allows project teams and decision-makers to consider
embodied carbon in the scoping phases, and thereby can help to consider lower
emitting alternatives or to optimise carbon reduction opportunities through the
remainder of project development.
Notably, there is also some variation in the value of carbon used in business
cases. Assessing business cases using a standardised national value for carbon
ensures that the emissions impact of projects can be compared on a like for like
basis by decision-makers. Infrastructure Australia released a Valuing emissions
for economic analysis guide in March 2024 which provides national carbon values
for use in infrastructure business cases – these values are required to be used
in business cases for nationally significant projects seeking Australian
Government funding being assessed by Infrastructure Australia.
To achieve the GHG reduction targets set by the Australian Government,
governments must consistently and rigorously integrate decarbonisation into
infrastructure planning as part of business-as-usual processes.
v. Excluding enabled emissions from downstream users.
OTHER SUSTAINABILITY CONSIDERATIONS
There are examples of good sustainability practices across the infrastructure
sector, such as the Victorian Government’s Recycle First Policy and generally a
commitment by most states and territories to achieve an Infrastructure
Sustainability Ratingvi for their major infrastructure projects. Circular
economy policies and third-party accreditation help highlight sustainability
opportunities and drive good practices in project delivery. However, mechanisms
such as third-party ratings can see sustainability measures considered too late
in the project development lifecycle, generally during the
procurement/construction phases, with measures being driven by contractor
innovation rather than intentional project outcomes.
Recognising opportunities to reduce operational and embodied emissions at the
outset and as part of project planning, including assessing emission reductions
in options analysis and business cases will ensure decision-makers can make net
zero-aligned infrastructure investments. It can also highlight where existing
procurement practices and engineering specifications require flexibility to
enable the use of low emissions construction materials.
Lastly, the impact of environmental externalities, such as land clearing or tree
plantings, which result in negative and positive impacts on biodiversity, as
well as environmental costs and offsets, are not usually included in business
cases. Although some of these externalities and costs may be small in relation
to the project’s overall costs and benefits, proponents should attempt to
describe them. Providing transparency of expected environmental impacts
qualitatively can highlight opportunities to improve environmental outcomes,
such as avoiding clearing remnant vegetation, which may have high conservation,
biodiversity or other benefits but are hard to quantitatively assess.
vi. The Infrastructure Sustainability Rating Scheme is a rating system for
evaluating economic, social and environmental performance of infrastructure
across the planning, design, construction and operational phases of
infrastructure assets. See https://www.iscouncil.org/is-ratings/ for more
information.
EMBEDDING RESILIENCE OUTCOMES
Infrastructure Australia has also identified a need to better consider
resilience in infrastructure planning and decision-making, through business case
guidelines, capital asset planning and assurance processes.
An agreed methodology and guidance on how to value resilience in decision-making
through the infrastructure lifecycle and the development of a nation-wide
approach to quantifying risk, costs, benefits and performance of resilience
assets and places is needed. This approach should be aligned across
jurisdictions, referenced in policies and embedded in assessment frameworks and
processes.
The risks posed by increasing extreme weather, mean temperatures, sea level rise
and natural disasters (such as flooding and drought) will challenge the
resilience of infrastructure built to existing standards and planning. Research
has demonstrated that private infrastructure assets could see 27% loss in asset
value by 2050 due to climate risks.14 Public infrastructure is similarly exposed
– and this poses the risk of disruptions to services on which communities and
businesses rely, as well as write-downs of public assets, impacting government
balance sheets.
Given a major share of natural disaster costs arise from damage to critical
infrastructure, estimates suggest $17 billion (in present value terms) may be
required for the direct replacement of essential infrastructure during the
period between 2015 and 2050 due to natural disaster damage.15 This does not
include costs stemming from service disruption.
Despite an increasing appetite for change, infrastructure is being delivered
that is generally not sufficiently resilient to future events, resulting in poor
social, economic and environmental outcomes for communities and taxpayers.
Governments are at different points in embedding resilience and climate
adaptation into their frameworks and there are varying degrees of maturity
across infrastructure bodies’ guidance and assurance processes.
It is imperative that projects being considered for development and delivery
give regard to the long-term resilience implications of an asset’s operations,
location, climate risks and the shocks and stresses that are likely to occur
over the course of its lifetime.
TREND 5
TREND 5: DISRUPTION IMPACTS NOT INCLUDED IN BUSINESS CASES
As the scale and complexity of infrastructure projects grow, delivery schedules
are lengthening and the footprint and extent of community impacts are
increasing.
Disruption impacts include congestion and service disruptions due to
construction, impacts on or access to significant places including aboriginal
cultural heritage, and acquisitions of properties and relocation of businesses.
The construction footprint of a project is often larger than the area of the
asset itself, as land is utilised for workers facilities and equipment and
materials staging and storage.
Disruption impacts have important equity considerations that should be carefully
considered in the business case. This is because the communities who are
impacted during construction may not be the beneficiaries of the project.
There are implicit trade-offs between proposed project benefits and disbenefits
and to whom those benefits and disbenefits accrue. Further, short-term
disruptions, especially if they are unplanned, can be disastrous for long-term
economic benefits.
While some disruptions are unforeseen, many disruptions can be anticipated, and
therefore attempting to describe and quantify all disruptions can reduce the
probability of unplanned events by highlighting potential mitigants, including
further planning, contractual considerations and community engagement.
Analysis of a project’s costs and benefits helps decision makers understand the
balance of project (dis)benefits versus costs. Infrastructure Australia’s
Assessment Framework recommends that disruption impacts are included in the CBA
for projects where these costs are expected to be large. The costs are likely to
be significant when building a major transport upgrade (light rail, rail or a
major road expansion) through a highly urbanised and developed area.
While CBA describes the balance of costs and (dis)benefits, it does not provide
transparency as to whom, when and where (dis)benefits accrue. Equity analysis
that maps to whom and where (dis)benefits accrue can provide this transparency.
Infrastructure Australia’s Assessment Framework recommends business cases
describe and analyse distributional effects, including the scale of those
effects at a spatial and temporal level. Maps, diagrams and charts can help
illustrate the scale of those effects. State and territory governments should
ensure that business case frameworks require disruption impacts in CBA, and
distributional impact analysis, particularly for large projects in urban areas.
TREND 6
TREND 6: LACK OF RIGOUR IN ECONOMIC ANALYSIS
Infrastructure Australia has observed that business cases can rely on
cherry-picked assumptions and data to bolster the economic case for projects. In
Infrastructure Australia’s analysis of 77 business case evaluations, unrealistic
or non-standard modelling inputs/assumptions was the third most identified issue
in the assessment of project economic appraisals – being reported in 63% and 78%
of road and rail business cases respectively.
Inaccurate assumptions can lead to misleading benefit-cost ratios that are
inflated by benefits that may not materialise. Overstating project benefits
undermines decision makers’ ability to allocate public resources efficiently and
erodes the options analysis process, by preferencing foregone planning outcomes
rather than robustly testing options.
Infrastructure Australia’s Assessment Framework stipulates the Australian
Transport Assessment and Planning Guidelines16 and/or Austroads assumptions that
should be used, to ensure business cases conform to nationally standardised
assessment practices. Standardisation provides a common approach to measuring
and evaluating projects, supports transparent funding decisions based on a
consistent and agreed set of inputs, and enables governments to compare
projects’ economic results on a like-for-like basis. As research on major
project assessment has found, CBA as a decision tool is only reliable when the
inputs and methodologies used are consistent, standardised and reliable.17,18
In Infrastructure Australia’s analysis of business cases, induced demand was
cited as an issue in 40% of road and 60% of rail business case evaluations. In a
study of a proposed road project in Denmark, researchers showed accounting for
induced demand lowers travel time savings, increases negative externalities
(e.g. noxious fumes) and results in a considerably lower benefit-cost ratio.19
From a GHG emissions perspective, appropriately accounting for induced demand is
critical for identifying the impact of infrastructure proposals on Australia’s
emissions targets.
Business cases are often not modelling demand based on post-COVID pandemic
changes in travel patterns (including for peak road and public transport demand)
or testing model results through post-COVID scenario analyses. Establishing a
new normal to reflect post-pandemic office vacancies/journey-to-work patterns is
critical to substantiating commuter demand and metropolitan congestion –
especially in project base cases. Assuming a return to pre-pandemic levels may
still provide a useful baseline against which to test CBA results using a
post-COVID status quo.
The impact of overly optimistic demand projections on project economic outcomes
is well documented. In a 2018 study, BITRE showed that 60% of the difference
between before construction CBA and after construction CBA in 12 road business
cases was inaccurate traffic forecasts and methodology errors.20,21
POST COMPLETION EVALUATIONS TO BETTER UNDERSTAND IIP PERFORMANCE
The Australian Government’s response to the Independent review of Infrastructure
Australia (2022) recognised the need for post completion reviews to provide
greater evidence that projects are achieving their intended outcomes.
Despite broad agreement on the merits of undertaking post completion reviews of
infrastructure projects, including the application of lessons learnt and
feedback for future investments, Infrastructure Australia’s research and
engagement with jurisdictions demonstrates that these reviews are not
consistently undertaken and rarely published.22,23
Post completion reviews identify important lessons for governments, communities
and industry regarding project successes following project delivery. These
reviews determine whether the desired objectives and/or forecast benefits and
costs have been realised and can explain the reasons for any differences between
the expected and actual outcomes. The aim is to draw appropriate lessons to feed
into future infrastructure development and delivery processes.
A component of post completion reviews is after construction cost-benefit
analysis, which helps to identify:
* the relationships between inputs, outputs, outcomes and benefits
* the extent of change in schedule, cost, outcomes and benefits
* appropriateness of techniques and assumptions for estimating costs and
benefits, including quantitative and qualitative analysis
* where projects have realised additional non-monetised benefits that were
unforeseen during planning.
Conducting a cost-benefit analysis after construction can also be used to
conduct benchmarking to help improve estimation techniques around costs and
risks during planning, or to substantiate forecasts in the business case by
comparing a portfolio of projects with similar characteristics. This can help
reduce optimism bias during the planning phase of infrastructure projects,
ensuring that scheduling, cost and risk of projects is better understood before
funding commitments are made.
The analysis and insights provided in this Annual Statement are based on
Infrastructure Australia’s evaluation of project business cases because post
completion data is not currently available at a national level to assess project
performance. Business cases provide a ‘before construction’ perspective of
project performance that is based on expectations and probabilities. While
useful for making decisions about the use of public resources in the future,
this upfront cost-benefit analysis does not provide confidence that the
forecasted performance was actually achieved.
Working with Infrastructure Australia and leveraging the well-defined guidance
on benefits realisation
and cost review at the jurisdictional level, there is a clear opportunity for
all governments to adopt a consistent approach to post completion reviews to
gain a better picture of whether the IIP is achieving its intended impact.
REFERENCES
1. Department of Infrastructure, Transport, Regional Development,
Communications and the Arts. Available at:
https://investment.infrastructure.gov.au/about/national-initiatives
2. Department of Infrastructure, Transport, Regional Development,
Communications and the Arts, 2023-27 Corporate Plan. Available at:
https://www.infrastructure.gov.au/sites/default/files/documents/Secretary%20Approved%20INFRA5702%20Dept%20Corporate%20Plan%202023_04.pdf
3. Australian Government. Available at:
https://www.infrastructure.gov.au/sites/default/files/documents/infrastructure-policy-statement-20231114.pdf
4. Ryan, P. and Duffield, C. 2017, Contractor Performance on Mega
Projects–Avoiding the Pitfalls. Mahalingam, A (Ed.) Shealy, T (Ed.) Gil, N
(Ed.) pp.1-34. Engineering Project Organization Society. The University of
Melbourne, Melbourne, Australia. Available via:
http://hdl.handle.net/11343/168246;
5. Infrastructure NSW 2023, 2022-23 State of Infrastructure Report, NSW
Government. Available via:
https://www.infrastructure.nsw.gov.au/investor-assurance/asset-management-assurance/resources/soir/
6. NSW Treasury 2019, WestConnex Project Summary 2019. NSW Government, Sydney,
Australia. Available via:
https://www.treasury.nsw.gov.au/sites/default/files/2020-11/0023_westconnex_summary.pdf
7. Victorian Auditor-General’s Office 2023, Major Projects Performance
Reporting 2023: Independent assurance report to Parliament 2023-24:9.
Available via:
https://www.audit.vic.gov.au/sites/default/files/2023-11/20231130_Major-Projects-Performance-Reporting-2023.pdf
8. The State of Queensland (Queensland Audit Office) 2023, Major Projects 2023
(Report 7: 2023–24). Available via:
https://www.qao.qld.gov.au/sites/default/files/2023-12/Major%20projects%202023%20%28Report%207%20%E2%80%93%202023%E2%80%9324%29.pdf
9. Infrastructure NSW 2022, Trends and Insights Report 2022, NSW Government.
Available via:
https://www.infrastructure.nsw.gov.au/investor-assurance/project-assurance/resources/trends-and-insights/
10. Boston Consulting Group (BCG) 2021, International Major Infrastructure
Projects Benchmarking Review: Final Report. Prepared by BCG for the Office
of Projects Victoria (OPV). Available via:
https://content.vic.gov.au/sites/default/files/2023-02/International-Major-Infrastructure-Projects-Benchmarking-Review.pdf
11. GHD, 2019, North East Link North East Link Environment Effects Statement
Technical report R – Greenhouse gas impact assessment, Prepared for North
East Link, Available from: Technical Report R Greenhouse gas
(bigbuild.vic.gov.au)
12. AECOM, West Gate Tunnel Project – Technical report Q – Greenhouse gas, May
2017.
13. Aurecon Jacobs Mott MacDonald in association with Grimshaw Joint Venture
(AJM JV) Melbourne Metro Rail Project – Greenhouse Gas Impact Assessment,
April 2016.
14. Extreme weather could burn investment portfolios by mid-century
(theconversation.com), accessed 21 March 2024
15. The Australian Transport Assessment and Planning Guidelines outline best
practice for transport planning and assessment in Australia. and are
available at: https://www.atap.gov.au/
16. Australian Business Roundtable for Disaster Resilience & Safer Communities
2016, Building resilient infrastructure, Australian Business Roundtable,
http://australianbusinessroundtable.com.au/our-research/resilient-infrastructure-report
17. Dobes, Leo, George Argyrous, and Joanne Leung. “Social Cost-benefit
Analysis in Australia and New Zealand. The State of Current Practice and
What Needs to Be Done”, 2016. https://doi.org/10.26530/oapen_610768
18. Vejchodská, Eliška. “Cost-benefit Analysis: Too Often Biased”. E+M Ekonomie
a Management 18, no. 4 (2015): 68–77.
https://doi.org/10.15240/tul/001/2015-4-005
19. Næss, Petter, Morten Skou Nicolaisen, and Arvid Strand. “Traffic forecasts
ignoring induced demand: a shaky fundament for cost-benefit
analyses.” European Journal of Transport and Infrastructure Research 12.3
(2012): 291-309.
20. Bureau of Infrastructure, Transport and Regional Economics (BITRE), 2018,
Ex-post Economic Evaluation of National Road Investment Projects – Volume 1
Synthesis Report, Report 145, BITRE, Canberra ACT.
21. Bureau of Infrastructure, Transport and Regional Economics (BITRE), 2018,
Ex-post Economic Evaluation of National Road Investment Projects – Volume 2
Case Studies, Report 145, BITRE, Canberra ACT.
22. Infrastructure Australia, Infrastructure Decision-making Principles (July
2018)
https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/Infrastructure_Decision-Making_Principles.pdf
23. Grattan Institute, The rise of megaprojects: counting the costs (November
2020). Available at:
https://grattan.edu.au/wp-content/uploads/2020/11/The-Rise-of-Megaprojects-Grattan-Report.pdf
* Annual Statements
Find out more about the Annual Statements here
* Annual Budget Statement 2024
Read the Annual Budget Statement 2024
Download report
File name
Please select your organisation type - Select -Education / AcademiaFederal
GovernmentGeneral PublicIAIndustryLocal GovernmentMedia / JournalismOtherPrivate
SectorState Government
Leave this field blank
* Annual Statements
Find out more about the Annual Statements here
* Annual Budget Statement 2024
Read the Annual Budget Statement 2024
Download report
File name
Please select your organisation type - Select -Education / AcademiaFederal
GovernmentGeneral PublicIAIndustryLocal GovernmentMedia /
JournalismOtherPrivate SectorState Government
Leave this field blank
Recommendation Summary Introduction and context Key infrastructure challenges
Key implications for infrastructure investment Recommendations for future
infrastructure investments Recommendation 1 Recommendation 2 Recommendation 3
Recommendation 4 References
ANNUAL BUDGET STATEMENT 2024
Download a PDF of the full report or read the full report below
--------------------------------------------------------------------------------
26 April 2024
RECOMMENDATION SUMMARY
Recommendation 1:Prioritise investment in project planning, development and
business case proposals to support a sustainable pipelineRecommendation
2:Prioritise proposals focused on better utilisation, maintenance and renewal of
existing infrastructure assets alongside potential new investments to ensure a
more sustainable investment mixRecommendation 3:Prioritise proposals that
support decarbonisation and the circular economyRecommendation 4:Prioritise
place-based infrastructure planning proposals
INTRODUCTION AND CONTEXT
PURPOSE OF THIS STATEMENT
As required under section 5DB of the Infrastructure Australia Act 2008 (Cth) (IA
Act), Infrastructure Australia, during each financial year, must give to the
Minister and table in both Houses of Parliament:
* an annual budget statement to inform the annual Commonwealth budget process
on infrastructure investment; and
* an annual performance statement on the performance outcomes being achieved by
states, territories and local government authorities in relation to the
infrastructure investment program and existing project initiatives funded by
the Commonwealth.
CONTEXT
In 2022, the Australian Government undertook an Independent Review of
Infrastructure Australia. Following the release of the Government’s response to
the Review, Parliament passed legislative amendments to the IA Act in December
2023. This included the requirement for Infrastructure Australia to produce and
publish these annual statements.
With the passage of the amendments occurring late in 2023, the Annual Budget
Statement 2024 was developed using readily available data within the time
available.
THE ANNUAL BUDGET STATEMENT 2024
This first edition of the Annual Budget Statement reflects on current
infrastructure challenges and provides advice on the types of infrastructure
proposals Infrastructure Australia recommends be considered during Budget
processes. It considers recent observed trends both globally and in Australia,
and evidence across infrastructure sectors, in particular for land transport.
This advice is based on Infrastructure Australia’s own research, together with
structured analysis of recent evidence from states and territories and the
research community.
Future editions of the Annual Budget Statement will use Infrastructure
Australia’s products, such as a targeted Infrastructure Priority List, to inform
advice to Government on recommended projects for consideration in future Budget
processes. Infrastructure Australia will also work with the Government to
consider how broader Government reforms to infrastructure investment planning
and decision-making and the availability of other data sources can inform future
statements.
KEY INFRASTRUCTURE CHALLENGES
Australia’s infrastructure networks and systems are vitally important. Secure
and resilient infrastructure is critical to connecting people and businesses,
powering the Australian economy and supporting communities in an increasingly
unpredictable natural environment.
The environment in which infrastructure is planned, delivered and operated has
changed significantly over time. Domestic and global challenges such as climate
change and extreme weather events, global availability of resources and
materials and changing movement patterns can create an environment of risk and
uncertainty.
However, there are significant opportunities to evolve our approach to
infrastructure planning, delivery and operation. Development of new
technologies, increased use and access to data, modern methods of construction
and a greater focus on renewables and recycled materials can transform our
infrastructure system and assist in overcoming the challenges we currently face.
Figure 1: Key infrastructure challenges
GROWING SCALE AND COMPLEXITY OF INFRASTRUCTURE INVESTMENTS
Capital infrastructure investment is growing across Australian jurisdictions in
sectors such as transport, social infrastructure, energy and buildings, driven
by factors including growing populations, changing needs, and emerging
priorities such as housing supply and the energy transition.1,2,3
There is also clear global and jurisdictional evidence of a trend towards an
increasing number and scale of ‘megaprojects’ (cost over $1 billion) in recent
years.4,5,6,7,8
This growth in spending has ramifications for project delivery across
infrastructure sectors in terms of cost and risk, and longer-term ramifications
due to a growing asset base and maintenance liability.
Figure 2 illustrates the significant increase in combined public and private
sector infrastructure investments over recent years and the scale of the forward
pipeline. The 5-year, $690 billion combined pipeline comprises building and
transport investments of $427 billion and $210 billion respectively, and a
further $53 billion utilities pipeline that includes an expected four-fold
increase in energy investments over the next four years. This rapid growth in
energy projects will need to compete for resources despite being overshadowed by
building and transport investments.
Figure 2: Combined Infrastructure (public and private sector) - annualised
investments by sector.
Source: Infrastructure Australia (2023).
Notes:
* Buildings: includes non-residential buildings for health, education, sport,
justice, transport buildings (e.g., parking facilities and warehouses), other
buildings (art facilities, civic/convention centres, and offices), limited
coverage of detached and semi-detached residential buildings.
* Transport: includes roads, railways, level crossings and other transport
projects such as airport runways.
* Utilities: includes water and sewerage, energy and fuels, gas and water
pipelines, and telecommunications.
Figure 3: Recent trends in Australia’s public infrastructure investment across
sectors
There are signals of shifts in investment trends. For example, Infrastructure
Australia’s research indicates that energy sector investment is expected to grow
nationally at around four times current activity levels.9
Jurisdictions such as Queensland are also seeing significant uplifts in energy
sector funding.2
There are also indications of a greater balance of investment across sectors
going towards regional areas. Infrastructure Australia’s 2023 Market Capacity
Report indicates that regions across NSW, Queensland, and the Northern Territory
will experience extraordinary growth in the three years from 2024-25, with
investment up to three times higher than the three years prior in some regions.9
MARKET CAPACITY CONSTRAINTS
Both in Australia and globally, there is a heated infrastructure market
resulting from growing demand pressure as well as market constraints in terms of
labour, skills and materials.10
SUSTAINED DEMAND
Australia will continue to see prolonged pressure on construction capacity
because of sustained cross-sectoral demand.
This includes uplifts in overall capital spending and/or accelerated delivery
(where capital expenditure is brought forward to earlier than originally
planned). In NSW, the number of projects in the state’s infrastructure program
increased by 4.8% year-on-year in 2022-23, while increasing numbers of
megaprojects are also moving into delivery, putting pressure on the market’s
capacity to deliver (both globally and locally) and leading to cost increases on
projects.11,1 Queensland has also seen substantial increases in overall
infrastructure project costs, partly resulting from the accelerated delivery of
capital projects such as rail and highway upgrades.2
Governments are recognising and acting to manage demand challenges, in both the
short and longer term, for example through:
* Proactive management and re-sequencing of projects in response to market
constraints – such as the Australian Governments review of the Infrastructure
Investment Program (IIP), the NSW Government’s 2023 Strategic Infrastructure
Review and the WA Government’s measures to smooth procurement and delivery of
projects to align to industry capacity.
* Improving visibility, transparency and detail of information on planning
infrastructure projects and procurement – such as the Major Projects Pipeline
Portal in NSW, the Infrastructure Projects in Western Australia report and
Tasmania’s 10-year Infrastructure Pipeline database.
* Recognising a need to shift the balance away from large-scale capital
projects towards a more sustainable investment mix, including greater
emphasis on utilisation and maintenance of existing assets to maximise spare
capacity and optimise outcomes.
In an environment of increasing demand pressure, factors such as rising material
costs, disrupted or under-supply of materials, labour and skill shortages in the
construction industry, and increasing labour costs have been identified by
multiple Australian jurisdictions as a major cause of cost increases and delays
to the delivery of infrastructure projects and represent an ongoing
challenge.8,12,13,2
LABOUR CONSTRAINTS
Infrastructure Australia’s 2023 Market Capacity Report demonstrates that labour
remains the top capacity constraint. Labour supply capacity is expected to
recover to pre-COVID levels by mid-2024 and to continue to increase steadily.
However, the expected rate of supply increase is not projected to close the
construction sector’s labour gap indicating longer-term structural barriers.
Further, the Report asserts the workforce must continuously upskill to keep
pace with evolving job designs and ways of working, and that improving workplace
culture in construction overall will unlock productivity benefits. However, a
range of cultural problems such as inflexible and extended working hours, lack
of diversity in teams and mental health issues, are reported to hinder women’s
participation in the sector and increasingly, that of young men. Many of these
issues may be addressed through reforms outlined by the Australian Government in
recent months (see below).9
Key Australian Government reforms addressing structural barriers to labour
capacity and productivity include:
* Working Future – The Australian Government’s White Paper on Jobs and
Opportunities – a roadmap with aims which include achieving sustained full
employment, promoting job security and reigniting productivity growth
* Australian Universities Accord – to improve the quality, accessibility,
affordability and sustainability of higher education.
* National Skills Agreement – designed to strengthen the vocational education
and training (VET) sector focused on addressing critical skills and workforce
shortages.
* Australian Government Migration Strategy – address skills shortages, improve
pathways, and enhance the overall migration experience.
* Build Skills Australia – the national Jobs and Skills Council for the built
environment sector identifying solutions to the workforce challenges facing
the construction, property and water industries.
* Australian Skills Guarantee – to introduce new national targets for
apprentices, trainees and paid cadets working on Australian Government funded
major projects, as well as introduce national targets for women to increase
the proportion of women working on major projects.
Significant levels of public investment in priority growth areas such as energy,
housing, heavy industries, and defence, will also compete for access to human
resources. Our latest Market Capacity analysis indicates a shortage of 229,000
full-time infrastructure workers as of October 2023, with shortages in all
occupational groups. These shortages are driven by heightened activity in public
and private infrastructure investments. Labour demands total 405,000 full-time
infrastructure workers, with transport accounting for 56% of total labour
demand, buildings 34%, and utilities the remaining 10%. Further, extraordinary
growth in public and private investments are expected to create labour gaps in
coming years in some regional hot spots. The top five regional hot spots are
Murray, mid-North Coast and the Riverina in NSW, the NT outback and central
Queensland.
MATERIALS CONSTRAINTS
Industry research indicates concerns that the domestic capacity of materials
supply – particularly steel and quarry products – cannot meet demand in
particular hotspots.9 Acute quarry shortages loom in a few hotspots across the
country, notably Melbourne, mid-North Coast NSW and South East Queensland.
Quarry materials are important to a range of infrastructure projects including
roads, bridges, houses, railways and other infrastructure. Projects carry the
risk of higher transportation costs, vehicle emissions and schedule delays if
forced to source quarry materials from further afield.
A FOCUS ON PRODUCTIVITY
Productivity in the construction sector has not improved for over 30 years. This
is partly due to the absence of diagnostic productivity measures, low
participation of women in the workforce, inconsistent adoption of new
technologies and modern manufacturing methods, and unfair risk allocation in
procurement and contracting.
State and territory governments have initiated or are in the process of
implementing reforms to increase industry productivity. However, joint effort by
all governments is necessary to support ongoing work and raise reform outcomes
to the national level. This effort should focus on developing diagnostic
productivity measures, establishing a national productivity baseline, and
creating national metrics and indicators to track progress. Regular progress
reporting against these measures should be provided to relevant
intergovernmental forums and/or Ministerial Councils.
RESPONDING TO CLIMATE CHANGE
Climate change impacts such as extreme weather, fires and floods are directly
impacting existing infrastructure across sectors and jurisdictions and represent
a significant and growing risk to assets, systems and user outcomes. There is
growth in the frequency and intensity of these impacts, and this poses episodic
but extreme risk to both developing infrastructure and existing assets.14
Increasing disaster and resilience events require investment in more resilient
infrastructure, and create indirect impacts by requiring funding and resources
to be diverted to increased operational costs, post-disaster maintenance and
repair, reconstruction and recovery. As jurisdictions such as South Australia
and New South Wales have observed, this places significant added pressure on
already-constrained public finances as well as on market capacity for
infrastructure delivery.17,7
As identified by Infrastructure Western Australia in their State Infrastructure
Strategy, considering resilience not only includes a focus on the resilience of
an individual infrastructure asset, but also the contribution that piece of
infrastructure makes to resilience of the community overall.15 Fundamental to
this is an understanding of likely future climate change impacts, auditing of
existing infrastructure systems, adequate planning, along with appropriate
consideration of resilience in existing and new infrastructure projects and
networks.
Similarly, infrastructure planning, investment and design decisions need to be
in step with national goals for decarbonisation and the circular economy. To
date, the transition to more sustainable approaches to infrastructure, such as
adoption of recycled materials as well as efforts to minimise embodied carbon
through project delivery, has been slow and inconsistent.
For example, approximately 43% of conventional materials used in road
construction could be replaced by a range of recycled materials. Cost savings
from the application of recycled alternatives in roads infrastructure range from
2% to 83%. Supporting the increased uptake of recycled materials in construction
can help to lower project costs, and support Australia’s decarbonisation efforts
to reach Net Zero by 2050.
Efforts to reduce embodied carbon would make a significant contribution to
Australia’s decarbonisation agenda. This can be achieved through the
decarbonisation of building materials on the supply side, and changes in how
Australia plans, designs and procures assets so that embodied carbon is
considered early. Research by Infrastructure Australia shows that low carbon
building materials and construction methods have the potential to achieve a 23%
saving of upfront carbon from the public infrastructure pipeline over the next
five years.
OTHER INFRASTRUCTURE DELIVERY CHALLENGES
* Increasing risks for project development and delivery due to complexity,
emerging technologies and integration with existing operations and other
systems and sectors.
* Ensuring appropriate timing and engagement for planning and environmental
approval processes, including community engagement.
KEY IMPLICATIONS FOR INFRASTRUCTURE INVESTMENT
RISKS TO ON-TIME, ON-BUDGET DELIVERY
Infrastructure Australia’s 2021 National Risk Study highlighted that, both
globally and in Australia, larger projects are more likely to face increased
risks, costs and schedule overruns.14 This is reinforced by global research,
which demonstrates that:
* Projects across sectors (including land transport, water and energy)
experience average cost increases of between 10-39% from announcement to
delivery, and these levels of cost overrun have changed little over
time.16,11
* Most (86%) major transport infrastructure projects experience cost increases
or delays.17
* Cost increases on land transport projects are common and significant across
modes, project types and project sizes, with over half (53%) of major
transport projects exceeding initial estimated costs. Rail projects generally
perform worse, with 73% exceeding costs compared to 43% of road projects.11
* Delays to transport projects typically range from 7-33% compared to original
plans, while 35% experience delays of more than six months, with delays a key
contributing factor for many cost overruns.18,11
The performance of infrastructure projects in Australia is broadly in line with
these global trends. Australian studies indicate that the average cost increases
on transport infrastructure projects in Australia typically range from around
12-52%.19,20,21 This is reinforced by evidence from Australian jurisdictions.
For example:
* A 2023 review of 20 major infrastructure projects in Western Australia shows
total cost increases of almost $2 billion (22.5%) compared to original
budgets, with 14 projects exceeding budgeted costs by 10% or more and four
seeing costs more than double.12
* In New South Wales, cost escalation was reported as a major contributing
factor for 15% of underperforming Tier 1 projects.1
* Self-assessments by Victorian agencies indicate 13% of major projects face
cost increases of 11-20% over budget, with 4% of projects expecting more than
20% increases. 28 out of 101 projects included in a Victorian review saw
total estimated project investment increase by over 10%, and costs on 12
projects rose by more than 50% over original estimates.8
The evidence is clear that major infrastructure projects, irrespective of their
types, sectors and locations, often experience cost increases and delivery
delays. Infrastructure Australia’s 2021 National Risk Study highlighted key
strategies in the planning, scoping and development of projects to manage these
risks and their underlying causes, including:
* early engagement with contractors
* streamlined planning approvals
* avoiding premature project announcement of solutions, budgets and timeframes
* more in-depth investigations and use of early works packages.
THE NEED FOR A SUSTAINABLE INVESTMENT MIX
INCREASED RISKS ASSOCIATED WITH MEGAPROJECTS
The trend towards an increasing number and scale of ‘megaprojects’ (described
earlier) adds to the risk in governments’ infrastructure portfolios because of
their size, complexity and greater exposure to risk.4,7
Across sectors, megaprojects consistently exceed cost and time estimates to a
greater degree than other lower value projects that experienced overruns.11 This
global evidence is reinforced by recent infrastructure delivery trends observed
in Australian jurisdictions.8,7
The increased risks associated with megaprojects are partly due to their unique
characteristics. In particular, these issues relate to higher complexity –
including planning and delivery within dense, built-up areas with extensive
existing infrastructure, as well as challenges in the investment planning
process – and longer project timeframes, resulting in greater exposure to cost
and schedule risk.4,1,11
The trend towards increasingly large and complex infrastructure projects also
has implications for the complexity of procurement and contracting processes.
This trend is observed internationally, leading to greater prevalence of
adversarial engagements and issues with risk transfer during delivery, impacting
project delivery costs and delays.11 In recent years, states and territories
have reported similar challenges with procurement and contract management
processes as factors impacting on costs, timeframes and delivery confidence of
infrastructure projects.12,1
Megaprojects in sectors such as transport can also represent much more complex,
multi-dimensional urban development and renewal interventions than more typical
road or rail infrastructure projects. This complexity can make approaches to
investment planning, appraisal and business case development more challenging
for agencies based on standard guidelines.
At the same time, international research shows that integrated planning,
business case assessments and front-end due diligence are some of the most
important areas for improving the performance of megaprojects.4 In NSW, key
identified causes of increased megaproject risks also include unclear project
roles and responsibilities and inadequate approaches to risk management and
procurement.1
GROWING MAINTENANCE LIABILITIES AND AGEING ASSETS
Some jurisdictions indicate a growing challenge with ageing assets. The
Queensland Audit Office reports that estimated actual capital expenditure across
all agencies in Queensland was 14% higher than expected in 2022-23, in part due
to additional costs required to maintain ageing infrastructure in the energy
sector, as well as rising supply costs and severe weather events.2
Infrastructure NSW’s State of Infrastructure Report 2022-23 indicates that all
infrastructure sectors in NSW reported issues with ageing assets, with evidence
that more ageing assets are linked to an increase in high-risk safety incidents,
maintenance challenges and impacts on service delivery.7
In addition to a growing challenge, understanding the problem at hand is another
concern. Infrastructure WA notes that asset management practices, for the
state’s approximate $159 billion asset base, varies considerably across
government. This presents a challenge in determining both the size and cost of
the backlog in maintenance across the state. Infrastructure WA also found that
the variability of reported maintenance expenditure is suggestive of a large
amount of reactive maintenance.15
RECOMMENDATIONS FOR FUTURE INFRASTRUCTURE INVESTMENTS
Australian governments will play a critical role in meeting the challenges
outlined above. As a major planner, funder, procurer and owner of
infrastructure, governments have an important role in ensuring that
infrastructure investments help to progress broader national goals and
objectives, such as decarbonisation, waste action and improving productivity.
Productivity growth has slowed over the past decade in Australia.22
Infrastructure investments can support productivity and economic growth by
improving the efficient movement of freight and people, increasing a network’s
reliability and/or resilience, and reducing ongoing maintenance costs.
Infrastructure Australia recommends that the Australian Government considers
productivity benefits at the early stages of project planning and ensures that
productivity-enhancing proposals form the majority of its investment portfolio.
Taking appropriate time to plan and select the right mix of infrastructure
investments will improve the ability of governments to take these broader
objectives into consideration.
For example, an appropriate mix of build and non-build investments can deliver
greater capacity in our infrastructure with less resources, balance portfolio
risk, support meeting Australia’s climate targets and assist with addressing
significant market capacity demand. An important enabler to this is ensuring the
consideration of a range of options when considering infrastructure
interventions. Conversely, a portfolio comprising a large proportion of
megaprojects can significantly increase risk and the likelihood of
cost overruns.
In concluding the 2024 Annual Budget Statement, Infrastructure Australia makes
the following recommendations for the Australian Government to consider in
determining and prioritising projects for investment.
RECOMMENDATION 1
RECOMMENDATION 1: PRIORITISE INVESTMENT IN PROJECT PLANNING, DEVELOPMENT AND
BUSINESS CASE PROPOSALS TO SUPPORT A SUSTAINABLE PIPELINE
Infrastructure Australia encourages the Australian Government to keep in mind
existing pressures on the infrastructure construction market when contemplating
new and additional investments in infrastructure. This includes considering:
* the relative priority of the Australian Government’s infrastructure
investments across sectors, such as housing, energy and transport, which are
often competing for the same construction resources.
* the impact and timing on existing commitments in considering any potential
new investments, especially in regions with identified ‘hotspots’ in terms of
labour and materials supply challenges.
As infrastructure construction market demand still significantly outweighs
supply, active demand management will be an ongoing area for action. Governments
will need to remain vigilant and discerning in their infrastructure spend, in
the face of budget and inflationary pressures over the short to medium term.
Infrastructure Australia is very supportive of government-led demand management
initiatives such as the Australian Government’s recent review of the IIP to
ensure the right projects are prioritised for funding and delivered at the right
time.
With this in mind, and coupled with the priority of a sustainable, deliverable
infrastructure pipeline, Infrastructure Australia recommends the Australian
Government continues to work with jurisdictions, across all sectors, to
prioritise the development of planning and business case proposals for
consideration in the next Budget process.
This will assist in both managing existing market capacity constraints and
ensuring that infrastructure proposals delivered in future are robustly scoped
and costed, reducing the risk of scope changes and cost increases. It also
assists in developing a clear, well-planned pipeline of work for the market to
respond to and is particularly important to appropriately manage the increased
risk associated with megaprojects outlined above.
In relation to land transport infrastructure, this approach also aligns with
recommendations in the Government’s Independent Strategic Review of the IIP and
the Independent Review of the National Partnership Agreement on Land Transport
Infrastructure Projects.
RECOMMENDATION 2
RECOMMENDATION 2: PRIORITISE PROPOSALS FOCUSED ON BETTER UTILISATION,
MAINTENANCE AND RENEWAL OF EXISTING INFRASTRUCTURE ASSETS ALONGSIDE POTENTIAL
NEW INVESTMENTS TO ENSURE A MORE SUSTAINABLE INVESTMENT MIX
The evidence of a growing imbalance towards capital expenditure over asset
maintenance and renewals is a significant concern to the long-term financial
sustainability of managing the existing asset base and the continued ability of
infrastructure assets to serve the needs of the community.
Optimising current assets and networks can be a more efficient and
cost-effective method of meeting current and future needs than constructing new
expensive, long-lived assets that further add to the growing whole-of-life costs
of asset portfolios and increase pressure on the market’s capacity to deliver.
Ensuring an appropriate investment mix can assist in managing the infrastructure
portfolio risk profile, derive lower cost solutions, lessen market capacity
constraints and assist in reducing greenhouse gas (GHG) emissions.
Infrastructure Australia recommends that the Australian Government work with
jurisdictions to prioritise development of proposals focused on better
utilisation, maintenance and renewal of existing infrastructure assets alongside
potential new investments. This includes potential enhancements required to
improve the resilience of existing infrastructure assets.
RECOMMENDATION 3
RECOMMENDATION 3: PRIORITISE PROPOSALS THAT SUPPORT DECARBONISATION AND THE
CIRCULAR ECONOMY
Infrastructure is a key contributor to Australia’s GHG emissions footprint. It
is estimated that 70% of Australia’s emissions are directly attributable to or
influenced by infrastructure.23 Decarbonising infrastructure presents
opportunities to reduce costs and improve productivity through design choices
that minimise or avoid emissions, and through the use of low carbon and recycled
materials.
To meet Australia’s emissions reduction targets, governments must integrate
decarbonisation into business-as-usual infrastructure processes. This includes
reducing the embodied carbon intensity of public infrastructure projects, the
emissions associated with materials and construction and throughout an asset’s
lifecycle, across all sectors.
Governments can leverage their purchasing power to create circular economy
supply chains and lower the adoption costs of recycled and low emissions
building materials. By encouraging innovation in construction practices and use
of low emissions materials, governments can help make these materials more
viable substitutes for use in the private sector.
In support of driving more sustainable approaches to infrastructure,
Infrastructure Australia recommends the Australian Government prioritise new
investments that clearly demonstrate an aim to maximise, where appropriate, the
proportion of recycled materials used in project design and construction, as
well as potentially recycling or reusing materials during the project’s
lifecycle.
RECOMMENDATION 4
RECOMMENDATION 4: PRIORITISE PLACE-BASED INFRASTRUCTURE PLANNING PROPOSALS
Infrastructure Australia supports the Government’s commitment to place-based,
corridor and precinct planning through mechanisms such as the regional and urban
Precinct and Partnerships programs and reforms to the IIP. It is recommended
that the Australian Government continues to provide funding to projects and
programs with a place-based, corridor or precinct focus.
Coordinated cross-sectoral planning across all levels of government is critical
for the Australian Government to be able to identify ‘investments that ensure
the planned development of cities and suburbs and regions by linking strategic
planning, population growth, the supply and availability of housing and land
transport infrastructure investment’ which forms part of the Australian
Government’s Infrastructure Policy Statement.
For example, understanding the new or upgraded enabling infrastructure required
to support the 1.2 million homes to be delivered under the National Housing
Accord, such as transport, water communications and community facilities, will
be critical to achieving the shared ambition of well-located, affordable
homes.24
In addition, in an era of increasing investment in megaprojects, strategic
planning can ensure that these significant investments are delivered in the
right place and at the right time, sequenced appropriately, manage community
disruption appropriately and maximise their wide-ranging benefits to the
community.
This will be important for geographical locations where multiple government
investments are being considered to facilitate different government priorities.
For example, a geographical location earmarked for critical minerals development
will also need to consider enabling infrastructure such as energy,
communications, transport and potentially housing.
REFERENCES
1. Infrastructure NSW 2022, Trends and Insights Report 2022, NSW Government.
Available via:
https://www.infrastructure.nsw.gov.au/investor-assurance/project-assurance/resources/trends-and-insights/
2. The State of Queensland (Queensland Audit Office) 2023, Major Projects 2023
(Report 7: 2023–24). Available via:
https://www.qao.qld.gov.au/sites/default/files/2023-12/Major%20projects%202023%20%28Report%207%20%E2%80%93%202023%E2%80%9324%29.pdf
3. Victorian Auditor-General’s Office 2022, Quality of Major Transport
Infrastructure Project Business Cases: Independent assurance report to
Parliament 2022-23:5. Available via:
https://www.audit.vic.gov.au/sites/default/files/2022-09/20220921%20Business%20Cases_0.pdf
4. Ninan, J., Clegg, S., Burdon, S., and Clay, J. 2023, Reimagining
Infrastructure Megaproject Delivery: An Australia—New Zealand Perspective.
In: Sustainability 15, no. 4: 2971. Available via:
https://doi.org/10.3390/su15042971
5. Ryan, P. and Duffield, C. 2017, Contractor Performance on Mega
Projects–Avoiding the Pitfalls. Mahalingam, A (Ed.) Shealy, T (Ed.) Gil, N
(Ed.) pp.1-34. Engineering Project Organization Society. The University of
Melbourne, Melbourne, Australia. Available via:
http://hdl.handle.net/11343/168246
6. Terrill, M., Emslie, O., & Moran, G. 2020, The rise of megaprojects:
counting the costs. Grattan Institute. Available via:
https://grattan.edu.au/wp-content/uploads/2020/11/The-Rise-of-Megaprojects-Grattan-Report.pdf
7. Infrastructure NSW 2023, 2022-23 State of Infrastructure Report, NSW
Government. Available via:
https://www.infrastructure.nsw.gov.au/investor-assurance/asset-management-assurance/resources/soir/
8. Victorian Auditor-General’s Office 2023, Major Projects Performance
Reporting 2023: Independent assurance report to Parliament 2023-24:9.
Available via:
https://www.audit.vic.gov.au/sites/default/files/2023-11/20231130_Major-Projects-Performance-Reporting-2023.pdf
9. Infrastructure Australia 2023, Infrastructure Market Capacity 2023 Report.
IA, Sydney. Available via:
https://www.infrastructureaustralia.gov.au/sites/default/files/2023-12/IA23_Market%20Capacity%20Report.pdf
10. Boston Consulting Group (BCG) 2021, International Major Infrastructure
Projects Benchmarking Review: Final Report. Prepared by BCG for the Office
of Projects Victoria (OPV). Available via:
https://content.vic.gov.au/sites/default/files/2023-02/International-Major-Infrastructure-Projects-Benchmarking-Review.pdf
11. Infrastructure NSW 2023, Annual Report 2022-23, NSW Government. Available
via: https://www.parliament.nsw.gov.au/tp/files/187101/INSW Annual Report
2023.pdf
12. Office of the Auditor General (Western Australia) 2023, 2023 Transparency
Report: Major Projects, Report 6: 2023-24. Available via:
https://audit.wa.gov.au/reports-and-publications/reports/2023-transparency-report-major-projects/
13. Infrastructure SA 2023, Capital Intentions Statement 2023. Available via:
https://www.infrastructure.sa.gov.au/our-work/capital-intentions
14. Infrastructure Australia 2021, A National Study of Infrastructure Risk: A
report from Infrastructure Australia’s Market Capacity Program. IA, Sydney.
Available via:
https://www.infrastructureaustralia.gov.au/sites/default/files/2021-10/A%20National%20Study%20of%20Infrastructure%20Risk%20211013a.pdf
15. Infrastructure Western Australia 2022, Foundations for a Stronger Tomorrow
State Infrastructure Strategy. Available via:
https://prod-iwa-public-files.s3.ap-southeast-2.amazonaws.com/public/2022-07/strategy_download/2022
Final SIS.pdf
16. Flyvbjerg, B. 2016, The Fallacy of Beneficial Ignorance: A Test of
Hirschman’s Hiding Hand. In: World Development, Vol. 84, Available via:
https://ssrn.com/abstract=2767128
17. Flyvbjerg, B., Holm, M. and Buhl, S. 2002, Underestimating Costs in Public
Works Projects: Error or Lie? In: Journal of the American Planning
Association, Vol. 68, No. 3,pp 279-295. Available via:
https://ssrn.com/abstract=2278415
18. Flyvbjerg, B., Holm, M. and Buhl, S. 2004, What Causes Cost Overrun in
Transport Infrastructure Projects? In: Transport Reviews, vol. 24, no. 1,
January 2004, pp 3-18. Available via:
https://doi.org/10.1080/0144164032000080494a
19. Duffield, C., Raisbeck, P. and Xu, M. 2008, Report on the performance of
PPP projects in Australia. In: Construction Management and Economics, 28:4,
pp 345-359. University of Melbourne. Available via:
https://doi.org/10.1080/01446190903582731
20. Love, P., Wang, X., Sing, C.-P. and Tiong, R. 2013, Determining the
Probability of Project Cost Overruns. In: Journal of Construction
Engineering and Management 139.3, pp. 321–330. Available via:
https://doi.org/10.1061/(ASCE)CO.1943-7862.0000575
21. Terrill, M. and Danks, L. 2016, Cost overruns in transport infrastructure.
Grattan Institute. Available via:
https://grattan.edu.au/wp-content/uploads/2016/10/878-Cost-overruns-on-transport-infrastructure.pdf
22. Commonwealth of Australia 2023, Working Future. The Australian Government’s
White Paper on Jobs and Opportunities. Available via:
https://treasury.gov.au/sites/default/files/2023-10/p2023-447996-working-future.pdf
23. ClimateWorks Australia 2020, Reshaping Infrastructure for a Net Zero
Emissions Future. ClimateWorks Australia, Victoria. Available via
https://www.climateworkscentre.org/resource/issues-paper-reshaping-infrastructure-for-a-net-zero-emissions-future/
24. The Treasury 2022, Delivering the National Housing Accord. Australian
Government, Canberra. Available via:
https://treasury.gov.au/housing-policy/accord
* Annual Statements
Find out more about the Annual Statements here
* Annual Performance Statement 2024
Read the Annual Performance Statement 2024 here
Recommendations
Download report
File name
Please select your organisation type - Select -Education / AcademiaFederal
GovernmentGeneral PublicIAIndustryLocal GovernmentMedia / JournalismOtherPrivate
SectorState Government
Leave this field blank
* Annual Statements
Find out more about the Annual Statements here
* Annual Performance Statement 2024
Read the Annual Performance Statement 2024 here
Recommendations
Download report
File name
Please select your organisation type - Select -Education / AcademiaFederal
GovernmentGeneral PublicIAIndustryLocal GovernmentMedia /
JournalismOtherPrivate SectorState Government
Leave this field blank
NEW BOARD APPOINTMENTS FOR INFRASTRUCTURE AUSTRALIA
NEW BOARD APPOINTMENTS FOR INFRASTRUCTURE AUSTRALIA
* Read more about New Board appointments for Infrastructure Australia
The Australian Government has appointed Cr Colin Murray as the new Chair of the
independent Infrastructure Australia Board. Cr Murray is joined by Vicki Meyer,
Cr Vonette Mead, Amanda Cooper, Dr Vanessa Guthrie AO, Elizabeth Schmidt and
Robert Moffat who have also been appointed as Directors of Infrastructure
Australia’s Board.
FIRST INFRASTRUCTURE MARKET CAPACITY REPORT REVEALS SURGE IN DEMAND FOR SKILLS,
LABOUR, PLANT AND MATERIALS
FIRST INFRASTRUCTURE MARKET CAPACITY REPORT REVEALS SURGE IN DEMAND FOR SKILLS,
LABOUR, PLANT AND MATERIALS
* Read more about First Infrastructure Market Capacity report reveals surge in
demand for skills, labour, plant and materials
Infrastructure Australia has today published its first Infrastructure Market
Capacity report, forecasting a surge in demand for skills, labour and materials
due to the rapid increase in public infrastructure investment.
2021 INFRASTRUCTURE MARKET CAPACITY REPORT
2021 INFRASTRUCTURE MARKET CAPACITY REPORT
* Read more about 2021 Infrastructure Market Capacity report
The Infrastructure Market Capacity report responds to a request from the Council
of Australian Governments in March 2020 for Infrastructure Australia to
regularly report on the capacity of the market to deliver on the record
investment pipeline, reflecting the record investment in the sector and the
necessary demand for skills and materials to meet these levels.
INFRASTRUCTURE AUSTRALIA PUBLISHES 2021 AUSTRALIAN INFRASTRUCTURE PLAN
INFRASTRUCTURE AUSTRALIA PUBLISHES 2021 AUSTRALIAN INFRASTRUCTURE PLAN
* Read more about Infrastructure Australia publishes 2021 Australian
Infrastructure Plan
Infrastructure Australia publishes 2021 Australian Infrastructure Plan - A
reform roadmap to leverage the $110b infrastructure spend and drive the national
recovery
INFRASTRUCTURE AUSTRALIA CHARTS A PATHWAY TO RESILIENCE AS THE NATIONAL COST OF
NATURAL DISASTERS HITS $39BN BY 2050
INFRASTRUCTURE AUSTRALIA CHARTS A PATHWAY TO RESILIENCE AS THE NATIONAL COST OF
NATURAL DISASTERS HITS $39BN BY 2050
* Read more about Infrastructure Australia charts a pathway to resilience as
the national cost of natural disasters hits $39bn by 2050
Infrastructure Australia has outlined practical steps to deliver infrastructure
that is more resilient to threats such as bushfires, droughts, floods, global
pandemic, and cyber-attacks, in new advisory papers released today.
A PATHWAY TO INFRASTRUCTURE RESILIENCE
A PATHWAY TO INFRASTRUCTURE RESILIENCE
* Read more about A Pathway to Infrastructure Resilience
A Pathway to Infrastructure Resilience recommends a whole-of-system, all-hazards
approach to resilience planning that focuses on strengthening an infrastructure
asset, network and sector, as well as the place, precinct, city, and region that
the infrastructure operates within.
2021 AUSTRALIAN INFRASTRUCTURE PLAN
2021 AUSTRALIAN INFRASTRUCTURE PLAN
* Read more about 2021 Australian Infrastructure Plan
The 2021 Australian Infrastructure Plan is a practical and actionable roadmap
for infrastructure reform.
PAGINATION
* Previous page Prev
* Current page 1
* Page 2
* Next page Next ›
Explore Site Map
Footer Top Navigation
* Priority List
* Projects
* Overview
* Assessment Framework
* Submit a proposal
* Proposal evaluations
* Funding & Financing
* Reports
* Overview
* Annual Statements
* Infrastructure Market Capacity
* Embodied Carbon Projections
* Regional Strengths and Gaps
* Australian Infrastructure Plan 2021
* Australian Infrastructure Audit 2019
* Valuing emissions for economic analysis
* View all our reports
* Data
* News
* Overview
* Media Releases
* Speeches
* Newsletters
* About
* What we do
* Our structure
* Careers
* Our Reconciliation Action Plan
* Accountability & Reporting
* Contact
* Subscribe
Subscribe SUBSCRIBE LinkedIn
Acknowledgement of Country
Infrastructure Australia acknowledges the Traditional Owners of Country
throughout Australia and recognises the continuing connection to lands, waters
and communities. We pay our respect to Aboriginal and Torres Strait Islander
cultures; and to Elders past and present.
Footer
* Copyright
* Disclaimer
* FOI
* Privacy
scroll to top